Tentative five-year deal ends West Coast port dispute
About the union
The International Longshore and Warehouse Union has some 13,000 members. They work at 29 ports from San Diego to Seattle.
--The Associated Press
Negotiators agreed to a tentative contract covering West Coast dockworkers on Friday evening, likely ending a labor dispute that had delayed shipments of millions of dollars worth of Orange County goods through the ports of Los Angeles and Long Beach.
“This was a challenging time for everyone, but we’ve made it through and a contract will be signed shortly,” said Long Beach mayor Robert Garcia. “Our port can get back to being the economic engine of Long Beach and the United States, and businesses across the nation can get the goods they need.”
The breakthrough came after nine months of negotiations that turned contentious in the fall, dramatically slowing traffic through 29 West Coast ports. The twin Southern California ports, the nation’s largest, account for 33 percent of all U.S. containerized cargo.
The Obama administration brought intense pressure to bear on both parties. When a federal mediator failed to solve the dispute, President Obama dispatched Labor Secretary Thomas Perez, who met over four days this week with officials from the International Longshore and Warehouse Union and the Pacific Maritime Association, which represents terminal operators.
Perez said that both the dockworkers’ union and their employers agreed to resume work Saturday evening.
Details of the five-year pact were not immediately released, and it must still be approved by the union’s rank and file.
However, in a joint statement, PMA President James McKenna and ILWU President Bob McEllrath said, “We are pleased to have reached an agreement that is good for workers and for the industry. Our ports can now resume full operations.”
Port officials were palpably relieved. “We...look forward to everyone getting back to business as usual starting immediately,” said Port of Long Beach Chief Executive Jon Slangerup. He added that federal involvement was “key in reaching this pact.”
“The marine terminal operators, longshore workers, truckers, railroads and others will be extremely busy as they work to clear out the massive backlog of cargo at all of the West Coast ports, including Long Beach,” Slangerup said.
The new agreement replaces a six-year contract that expired July 1. Terminal officials and union representatives had blamed each other for snafus at the ports, which delayed hundreds of massive ships from unloading cargo from China and other nations, and from loading goods destined for Asia.
The bottlenecks had a severe effect on many Orange County businesses, including manufacturers who sell their goods abroad and import components from Asia to assemble at local plants.
Among them were companies who sell everything from swimsuits and pyjamas to electric cable. Many firms lost money in recent months as they were forced to bring in goods by air, or divert shipments through ports on the East Coast or in Canada and Mexico.
Garbage companies which normally export paper, plastic and metal to China for recycling were unable to do so. Sue Gordon, a spokeswoman for Rainbow Environmental Services in Huntington Beach, said the company’s lot was overflowing with bales of blocked shipments.
“You put your materials in a cart and you put it out to the curb and you expect that it’s going to get picked up,” she said. ”No one thinks about what happens next. It has to be sorted, and sold. In China, they create goods and put them in cardboard. They need our recyclables.”
Statewide and nationwide, farmers were among the most affected. Produce and meat rotted before it could be exported. Even with the new agreement, many companies fear that the unpredictability of port operations will lead disappointed importers to take their business elsewhere.
Farm products are among the U.S.’s major exports. “But there is nothing that we produce that can’t be imported from elsewhere,” said Peter Friedmann, executive director of the Agriculture Transportation Coalition.
During an earlier port dispute, he noted, “Japanese candy makers couldn’t get our almonds, so they just got the almonds from Turkey instead. Twelve years later, many of those Japanese candy makers have still not come back to California almonds and that market was lost forever. ”
With the widening of the Panama Canal and with ports on the East Coast and Gulf Coast investing to attract more ships, some retailers have said they will think hard before depending on ports such as Los Angeles and Long Beach for the smooth flow of cargo.
Moreover, the labor dispute was not the only cause of delays. Before labor negotiations even started, a revolution in port logistics was causing snafus. A new generation of oversized ships carrying far greater loads of containers is forcing ports to undergo massive upgrades. The Port of Long Beach, for instance, is spending $4 billion to modernize its facilities.
With ever-larger vessels, carriers are taking on loads from a wider variety of customers. When the ships are unloaded, 25-ton containers destined for many different companies are stacked five deep, making it hard to unscramble quickly for just-in-time supply chains.
Also causing delays is a new system transferring ownership of chassis – the flatbeds used by semi trailer trucks to haul away containerized merchandise. The chassis were previously owned by shipping companies, which recently spun them off into separate leasing companies. The transition, undertaken to lighten the shipping firms’ balance sheets, has caused massive confusion.
At the same time, port tonnage has risen sharply since the recession.
Over the course of nine months of labor negotiations, wage and benefit issues were mostly resolved. But the sticking point was over rules for arbitration.
Under previous contracts, the arbitrator, who referees disputes over work slowdowns and discrimination, was effectively appointed for life. The ILWU wanted the system most other groups have, including Major League baseball, allowing either side to remove an arbitrator at the end of a contract. The union viewed the current arbitrator as biased.
The maritime association wanted to retain the current arrangement under which an arbitrator may not be removed unless both labor and management agree to do so.
Both sides dug in, partly because of tectonic changes at the ports. Automation has eliminated many physical jobs at the docks. Other jobs have moved to warehouses outside the union’s jurisdiction. When it comes to new job classifications within the ports, such as high-tech workers to control complex equipment, the arbitrator can decide whether those positions fall under the union.
Spokesmen for both sides declined to comment on how the issue was resolved.
Economists predicted that the slowdown would not have a long term effect on the nation’s $17.7 trillion economy. Maritime container imports account for about 4% of gross domestic product and exports for 1.5%.
“This was a challenging time for everyone, but we’ve made it through and a contract will be signed shortly,” said Long Beach mayor Robert Garcia. “Our port can get back to being the economic engine of Long Beach and the United States, and businesses across the nation can get the goods they need.”
The breakthrough came after nine months of negotiations that turned contentious in the fall, dramatically slowing traffic through 29 West Coast ports. The twin Southern California ports, the nation’s largest, account for 33 percent of all U.S. containerized cargo.
The Obama administration brought intense pressure to bear on both parties. When a federal mediator failed to solve the dispute, President Obama dispatched Labor Secretary Thomas Perez, who met over four days this week with officials from the International Longshore and Warehouse Union and the Pacific Maritime Association, which represents terminal operators.
Perez said that both the dockworkers’ union and their employers agreed to resume work Saturday evening.
Details of the five-year pact were not immediately released, and it must still be approved by the union’s rank and file.
However, in a joint statement, PMA President James McKenna and ILWU President Bob McEllrath said, “We are pleased to have reached an agreement that is good for workers and for the industry. Our ports can now resume full operations.”
Port officials were palpably relieved. “We...look forward to everyone getting back to business as usual starting immediately,” said Port of Long Beach Chief Executive Jon Slangerup. He added that federal involvement was “key in reaching this pact.”
“The marine terminal operators, longshore workers, truckers, railroads and others will be extremely busy as they work to clear out the massive backlog of cargo at all of the West Coast ports, including Long Beach,” Slangerup said.
The new agreement replaces a six-year contract that expired July 1. Terminal officials and union representatives had blamed each other for snafus at the ports, which delayed hundreds of massive ships from unloading cargo from China and other nations, and from loading goods destined for Asia.
The bottlenecks had a severe effect on many Orange County businesses, including manufacturers who sell their goods abroad and import components from Asia to assemble at local plants.
Among them were companies who sell everything from swimsuits and pyjamas to electric cable. Many firms lost money in recent months as they were forced to bring in goods by air, or divert shipments through ports on the East Coast or in Canada and Mexico.
Garbage companies which normally export paper, plastic and metal to China for recycling were unable to do so. Sue Gordon, a spokeswoman for Rainbow Environmental Services in Huntington Beach, said the company’s lot was overflowing with bales of blocked shipments.
“You put your materials in a cart and you put it out to the curb and you expect that it’s going to get picked up,” she said. ”No one thinks about what happens next. It has to be sorted, and sold. In China, they create goods and put them in cardboard. They need our recyclables.”
Statewide and nationwide, farmers were among the most affected. Produce and meat rotted before it could be exported. Even with the new agreement, many companies fear that the unpredictability of port operations will lead disappointed importers to take their business elsewhere.
Farm products are among the U.S.’s major exports. “But there is nothing that we produce that can’t be imported from elsewhere,” said Peter Friedmann, executive director of the Agriculture Transportation Coalition.
During an earlier port dispute, he noted, “Japanese candy makers couldn’t get our almonds, so they just got the almonds from Turkey instead. Twelve years later, many of those Japanese candy makers have still not come back to California almonds and that market was lost forever. ”
With the widening of the Panama Canal and with ports on the East Coast and Gulf Coast investing to attract more ships, some retailers have said they will think hard before depending on ports such as Los Angeles and Long Beach for the smooth flow of cargo.
Moreover, the labor dispute was not the only cause of delays. Before labor negotiations even started, a revolution in port logistics was causing snafus. A new generation of oversized ships carrying far greater loads of containers is forcing ports to undergo massive upgrades. The Port of Long Beach, for instance, is spending $4 billion to modernize its facilities.
With ever-larger vessels, carriers are taking on loads from a wider variety of customers. When the ships are unloaded, 25-ton containers destined for many different companies are stacked five deep, making it hard to unscramble quickly for just-in-time supply chains.
Also causing delays is a new system transferring ownership of chassis – the flatbeds used by semi trailer trucks to haul away containerized merchandise. The chassis were previously owned by shipping companies, which recently spun them off into separate leasing companies. The transition, undertaken to lighten the shipping firms’ balance sheets, has caused massive confusion.
At the same time, port tonnage has risen sharply since the recession.
Over the course of nine months of labor negotiations, wage and benefit issues were mostly resolved. But the sticking point was over rules for arbitration.
Under previous contracts, the arbitrator, who referees disputes over work slowdowns and discrimination, was effectively appointed for life. The ILWU wanted the system most other groups have, including Major League baseball, allowing either side to remove an arbitrator at the end of a contract. The union viewed the current arbitrator as biased.
The maritime association wanted to retain the current arrangement under which an arbitrator may not be removed unless both labor and management agree to do so.
Both sides dug in, partly because of tectonic changes at the ports. Automation has eliminated many physical jobs at the docks. Other jobs have moved to warehouses outside the union’s jurisdiction. When it comes to new job classifications within the ports, such as high-tech workers to control complex equipment, the arbitrator can decide whether those positions fall under the union.
Spokesmen for both sides declined to comment on how the issue was resolved.
Economists predicted that the slowdown would not have a long term effect on the nation’s $17.7 trillion economy. Maritime container imports account for about 4% of gross domestic product and exports for 1.5%.
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