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West Coast Port Contract Agreement Brings Certainty for Shippers

There won’t be any West Coast ports fiasco this time around.

The International Longshore and Warehouse Union’s ratification of a three-year contract extension with the Pacific Maritime Association for workers at 29 ports in California, Oregon and Washington avoids the messy and prolonged contract negotiations of three years ago and gives importers and exporters, shippers and freight handlers certainty and stability.

The final tally of ILWU members showed that 67 percent had voted in favor of the extension. The current agreement was set to expire on July 1, 2019, and now the newly approved three-year pact will extend the expiration to July 1, 2022.

That’s in sharp contrast for 2014, when negotiations didn’t begin until May of that year and the contact was allowed to lapse in July. Workers stayed on the job without a contract, but contentious talks led to slowdowns, cargo backups and other problems until an agreement was finally reached in February 2015 after then-Labor Secretary Tom Perez sat down with labor and management to broker an agreement.

Port congestion during the period posed significant threats to retail supply chains, particularly during the 2014 holiday season.

[Read more on cargo shipments: Cargo Imports Could Hit New Record as Merchants Stock Up]

“We applaud ILWU members for taking the unprecedented step of approving a contract extension well in advance of the contract expiration,” said Jonathan Gold, vice president for supply chain and customs policy at the National Retail Federation. “This agreement between the ILWU and PMA will provide the stability and predictability that NRF’s members and other supply chain stakeholders need to move their cargo efficiently through our ports.”

The contract extension will raise wages, maintain health benefits and increase pensions from 2019 to 2022. The results followed a year-long debate and democratic decision-making process that allowed every registered longshore worker from Bellingham, Washington, to San Diego to express their views and cast a ballot.

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“The rank-and-file membership has made their decision and expressed a clear choice,” said ILWU International president Robert McEllrath. “During the past year we saw a healthy debate and heard different points of view, with concerns raised by all sides. The democratic process allowed us to make a difficult decision and arrive at the best choice under the circumstances.”

The ILWU’s Coast Longshore Division represents about 20,000 workers on the West Coast.

“This first-of-its-kind contract extension is great news for the maritime industry and the nation, setting the stage for reliable and productive cargo operations for years to come,” PMA president James McKenna said. “This agreement also continues to provide ILWU workers with a generous wage and benefits package during a time of great change in the global maritime business.”

McKenna added that with this agreement in hand, “The West Coast waterfront has a tremendous opportunity to attract more market share and demonstrate that our ports and our workforce are truly world-class. We are fully committed to delivering the highest standards of reliability and productivity for years to come.”