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West Coast Dockworker Contract Talks on Pause: Report

Negotiations on a new labor contract for dockworkers across 29 West Coast ports have reportedly been shelved until next week.

A report Monday from trade publication Journal of Commerce (JOC) cited an anonymous source that said negotiations have been placed on hold until June 1. The news follows a JOC report on Friday that the International Longshore and Warehouse Union (ILWU) had requested last week the temporary halt begin May 20. A reason for the union’s request was not given.

The trade publication said committee meetings between the ILWU, which is negotiating a contract for some 22,000 workers, and the Pacific Maritime Association (PMA), the group representing 70 terminal operators and ocean carriers, still continue.

A spokesperson for the PMA could not be reached for comment and an ILWU spokesperson did not respond to a request for comment on Tuesday.

Port of Long Beach executive director Mario Cordero told Bloomberg on Friday, following the JOC report, he didn’t anticipate a new contract being negotiated before the current agreement’s July 1 expiration. Cordero instead told Bloomberg he anticipated “we may be looking to a couple of months thereafter.”

The PMA in November had offered a one-year extension on the current contract, which was effective from 2014, citing the continuing supply chain disruptions. The union opted to proceed with talks. The contract had already been extended in 2017 in an effort to avoid the slowdown at the ports in 2014 and 2015 that resulted from prolonged negotiations.

Stakeholders went into the start of the May 10 talks with some optimism, even as chatter mounted over what the possibility of a worker slowdown could have on an already fragile supply chain.

“We will get an agreement and it takes both sides,” ILWU President Willie Adams told Port of Los Angeles executive director Gene Seroka in a videotaped interview last month.

Adams waved off much of the hand-wringing in the lead up to the start of negotiations as overly dramatic reports that overlooked major strides made by workers during the height of the pandemic.

“We’re going to get an agreement and I wish instead of people writing things and saying that you’re going to throw the baby out with the bathwater or this or that’s going to happen, they ought to be talking about the positive things out of Covid. All the good things that have come out of this,” Adams told Seroka.

Retailers and other shippers, however, chose pragmatism over optimism heading into contract season. Many had already been re-routing cargo away from the West Coast ports to avoid congestion, opting instead for East and Gulf coast ports.

Deckers Brands CEO Dave Powers last week told Wall Street analysts that the Hoka and Ugg owner is “keeping a close eye on the labor contract negotiations with West Coast port workers” and hedging against potential disruption by “bringing in inventory earlier than what we normally do.”

The latest update to the contract talks comes as the industry braces for an uptick in imports from China as the country works through an overhang of cargo that resulted from the slowdown in goods movement caused by Covid-19 lockdowns.

Port of Long Beach’s Cordero told Sourcing Journal earlier this month prior to the start of negotiations the slowdown in cargo movement out of China would have to be made up in the weeks and months following the lockdowns, but the extent of the pileup is unknown.

“So, are we going to witness another import surge?” he said in relation to China. “My answer to that is ‘yes.’”

Meanwhile, ocean carrier Maersk warned in an advisory to shippers Tuesday of the increased possibility of a container dwell fee at the ports of Los Angeles and Long Beach being implemented, citing the continued congestion driven by a number of factors. The San Pedro Bay ports had been putting off implementation of the fee since it was first announced in November.

However, the “likelihood of the administration implementing the fee has risen significantly this month,” Maersk told customers.

“Since last year’s [dwell fee] announcement, supply chains have endured even more disruptions, including the Covid-19 pandemic, historic levels of goods coming into the U.S., geopolitical conflicts and challenges in global markets,” the Maersk advisory said. “In addition, the ILWU and the PMA have initiated labor negotiations for a contract that expires July 1 in advance of shipping peak season.”

Maersk said it is looking into other options outside of the fee, including moving containers to off-dock sites and the extension of a container pick-up credit program Saturdays.

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