On April 12, 2022, Bloomberg reported that the West Coast Labor Negotiation talks are set to begin on May 12, 2022, which is less than two months prior to the current contract expiration date on July 1, 2022. Two issues may be sticking points: (1) the union wants the PMA (Pacific Maritime Association) to develop and provide training programs for labor through a new facility recently opened at the port, and (2) carrier representative PMA is suspected of evoking the employers’ right to automate which could be a thorny issue to the ILWU.
Both ILWU President Willie Adams and ILWU Coast Committeeman Frank Ponce De Leon did not elaborate what demands would be for the labor side, however, they did call on the PMA to be more involved in developing training programs. Further, Adams stated, “billions and billions of dollars have been made by carriers and on May 12, it is just a part of the collective bargaining process that will commence.” In conclusion, Adams said, “the union’s relationship with ocean carriers and terminal operators, represented by the PMA will take collaboration and they will get there.”
Speculation to work out a new labor contract for the West Coast dockworkers remains optimistic, as the last two years of record consumer spending resulted in large cargo loads, particularly on the U.S. West Coast, which experienced cargo delivery delays and congestion. This means labor may have additional leverage as carriers set records profits. Wages and benefits could be sticking points while the employers’ right to automate could develop into a complicated issue.
PMA Chief Executive Officer, Jim McKenna is giving the negotiations 50-50 odds the talks will conclude smoothly and prior to July 1st. He indicated in part, “It may be too optimistic to say there won’t be any disruption before understanding what the demands and obstacles may be,” and further stated, “we are certainly trying to accomplish that and not for a lack of trying.”
Adams is crediting the efforts by the White House to get the parties to the negotiating table and resolve congestion and supply-chain issues at the ports brought on over the course of the pandemic. In years past, negotiations usually did not begin until the contract expired. In part, Adams stated, “The president was challenging everybody to put some skin in the game.”
U.S. inflation has accelerated to 8.5% and higher in many cities from the reported 7.9% in February 2022. The consumer price index increased from last year as it has been driven by skyrocketing energy and food costs. The U.S. Labor Department indicated the consumer-price index rose in March at the fastest annual pace since December 1981. Rising prices have been unrelenting with six straight months of inflation.
It is with little doubt the PMA will need to provide the ILWU with increased wages and health benefits to reach positive negotiations. As well, carriers need to provide training with appropriate funds to train labor and avoid the lack of hands-on training by the PMA which occurred in 2021.
Western Overseas will continue to update our business partners as we have further information. Please contact your Western Overseas representative with questions.