"Once burned, twice learned" appears to be the cliche of the day as West Coast dockworkers and waterfront management closed in late Friday on an extraordinary step to extend their collective bargaining agreement for three years, despite being just halfway through their current compact.
The International Longshore and Warehouse Union (ILWU), which represents about 20,000 workers at 29 ports, said Friday that early tallying indicated the contract extension, which would run until Jan. 1, 2022, would pass with about two-thirds of the members ratifying it. A final tally is expected to be announced later this week. The current five-year compact is set to expire on July 1, 2019.
No maritime stakeholder can recall a situation where a new labor contract has been agreed to, or an existing pact extended, with so much time remaining on the current agreement. Yet the circumstances that led in the February 2015 tentative contract agreement, followed by union ratification that May, may have pre-ordained such a scenario.
The nine-month battle between ILWU and Pacific Maritime Association (PMA), which represents waterfront management, was one of the most contentious in years, though it never resulted in a strike or management lockout. An ILWU work slowdown caused U.S. import traffic to languish on docks and on vessels both berthed and sitting on the water. Exports, many of them perishables shipments, sat rotting in warehouses because no vessels were available to transport them. U.S. importers and exporters re-routed their traffic to East and Gulf Coast ports; some of it never returned to the West Coast.
Only a last-ditch effort by then-Labor Secretary Thomas E. Perez, and a threat to move the talks to Washington, with President Obama possibly getting involved, forced both sides into hammering out an agreement.
Mindful of the extreme animus created by the dispute, as well as concerns that future service disruptions might compel more businesses to avoid the West Coast in favor of the expanded Panama Canal, which enables vessels to sail from Asia to the East Coast and bypass West Coast gateways, PMA approached the ILWU leadership in April 2016 to join talks aimed at extending the contract. ILWU members debated for more than a year before taking a ratification vote, the union said.
Another factor is that no one either side wants to stake out a position that may threaten the strong tonnage gains being reported by virtually all U.S. ports, including Los Angeles, Long Beach, and Oakland, Calif., the three biggest on the West Coast. The gains have been due to a combination of an improving global economy, larger vessels capable of handling more containers, and higher cargo-handling productivity at ports and terminals. The latter element may be the most pivotal, because the 2015 agreement did not introduce any productivity-enhancement measures, unlike the 2002 and 2008 accords. Instead, management's objective in 2014-15 was just to maintain normal operations at the ports.
The Port of Oakland said labor relations have been good and productivity high in the 30 months since the current contract was ratified. "We feel that a decision to extend the contract reflects improving relations and performance up and down the West Coast," said Chris Lytle, the port's executive director. Oakland, which handles more exports than imports, suffered greatly during the dispute because of its large export profile.
The National Retail Federation (NRF), which is the country's largest retailer trade group and has a huge stake in maritime labor affairs, hailed news of the extension. The agreement provides the stability and predictability that NRF's members and other supply chain stakeholders need to move their cargo efficiently through the ports, said Jonathan Gold, vice president of supply chain and customs policy for NRF.
Gold added that "nobody wants to see a repeat of the problems that were experienced in 2014-2015, and this remarkable sign of good faith on the part of both labor and management ensures that such a situation will be avoided."
Gartner, Inc.
