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White House Closely Tracking Logistics Negotiations Amid Rail Strike Threat

Shipping’s busy season is happening as two major labor negotiations with significant implications to the nation’s supply chain play out, but that won’t be enough to force the White House to inject itself in talks just yet.

White House Port and Supply Chain Envoy Stephen Lyons on Wednesday sat down with Port of Los Angeles executive director Gene Seroka and addressed the looming deadline for President Biden in relation to a new rail contract that would impact 115,000 workers, in addition to contract negotiations that are now in overtime for some 22,000 West Coast dockworkers.

Biden has until July 17 to form a Presidential Emergency Board (PEB) to help the National Carriers’ Conference Committee, which is negotiating on behalf of the major rail carriers, and a dozen unions on an agreement for a new labor contract. The two sides are in the midst of a 30-day cooling off period that began June 18 after mediation with the National Mediation Board failed to produce a resolution.

If a PEB is not formed, which is not likely, the unions could strike as early as Monday.

“I don’t want to get ahead of the president,” Lyons said during the media briefing. “There’s been a number of recommendations. He’s got until the 17th to make a decision on a PEB. I think what’s clear in this case, particularly as I talk to senior leadership and management in the Class 1 freights, they understand, as do the multiple unions here, that we’ve got to get a contract. It’s been too long. We’ve got to get these folks some wage increases. We’ve got to address some of these issues and I think that there’s a level of energy to move in that direction and so we’ll see how this all plays out.”

The Brotherhood of Locomotive Engineers and Trainmen confirmed Tuesday 99.5 percent of its membership has authorized a strike should a PEB not be formed.

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A strike would significantly impact the movement of cargo amid growing concerns over rail congestion.

More than 29,000 rail containers are currently sitting on dock at the Port of Los Angeles. That figure in more normal times is around 9,000, according to the Port of L.A.’s Seroka. Those containers, he said, are currently sitting an average of seven-and-a-half days, compared to the typical two-day dwell time.

“The bottom line: we must take action on this issue immediately to avoid a nationwide logjam,” Seroka said during the briefing.

While the potential for a rail strike looms, employers and labor in the West Coast dockworker negotiations have reiterated their commitment to continued cargo movement with no work stoppage or lockouts currently planned.

The former contract expired July 1, with both sides warning ahead of the expiration that talks would likely run past that date.

“I think the negotiations are at a place where you would think the negotiations should be at this particular point,” Lyons said of the dockworker contract. “I don’t think anybody expected that on the first of July there would be a contract. That’s not normally how it works. I do think there’s some hard work going on right now in San Francisco. I think both presidents understand the importance of achieving a contract in time and during that process not impeding the flow of goods for Americans.”

The briefing with Lyons was held the same day about 100 truck drivers moved through the San Pedro Bay port in protest against Assembly Bill 5 (AB5). The 2019 law would make it more difficult for truck drivers to be classified as independent contractors and would instead make them employees.

Truckers were shielded from AB5 temporarily as the bill was challenged in court. A state appellate court decision initially protected the trucking industry from a three-part test in classifying workers. That decision was later overturned in appeals court. The Supreme Court refused to review the decision last month, with AB5 now expected to be applied to truck drivers.

Lyons also said the White House is still “in the assessment phase” of AB5. “I’m not going to judge one way or the other,” he said. “It just is.”

“I would say this, though, for the truckers in whatever category you fall. Look, the truckers are so critical to the supply chain,” Lyons said. “And we’ve got to make sure that we’re setting the conditions to take care of them to the best of our ability and so we’ll remain focused on that…. We’ll continue to watch and we’ll continue to assess the impacts.”

The ports of Los Angeles and Long Beach both confirmed the protests did not impact terminal operations on Wednesday. A spokesperson for the Port of Oakland confirmed rumors of a similar protest Monday and that the situation would be monitored closely if a protest occurs.