The months-long contract negotiations between leaders at Pacific Maritime Association and the International Longshore and Warehouse Union appear to be strained, and that’s affecting business at the biggest and busiest port complex in North America.
Negotiations for a new collective bargaining agreement began in May, 2022 between PMA, which represents 70 ocean carriers and terminal operators at 29 West Coast ports and the ILWU, which has tens of thousands of members at over 60 local unions in California, Washington, Oregon, Alaska and Hawaii.
The contract covers more than 22,000 dockworkers.
The two sides issued a joint press release on Feb. 23 saying the parties had reached a tentative agreement on certain issues, including health benefits. But on March 20 it was reported that PMA leaders were accusing dockworkers at the Los Angeles and Long Beach seaports of forcing terminal shutdowns by failing to stagger meal breaks, creating delays in cargo operations and backups of trucks.
ILWU President Willie Adams has defended his members by saying they’re entitled to meal breaks. The exchange was seen as an unusual breach of peace considering union workers have been without a contract since last July.
As negotiations take place, industry leaders worry that a closure at the Los Angeles and Long Beach ports would be highly detrimental to the U.S. economy. According to a 2022 report prepared for the National Association of Manufacturers, a 15-day disruption could pose significant consequences.
“These two ports play an outsized role as a critical component of the nation’s transportation infrastructure, especially for the flow of exports out of and imports into the country,” the National Impact of a Los Angeles and Long Beach Port Stoppage report states. “Lost exports would directly reduce the output and employment of exporting firms and indirectly reduce activity in their supply chains.”
Delays and higher costs of imports could reduce gross domestic product and employment, according to the report.
During a March 17 news briefing, Port of Los Angeles Executive Director Gene Seroka said in addition to global macroeconomic factors, the ongoing labor negotiations have played a role in impacting business.
“Cargo owners have made it clear that they want the certainty of a signed deal,” Seroka said. “It’s important that we see a spring agreement between the longshore workers and Pacific Maritime Association. As I mentioned before, we really need that in order to start bringing cargo back to Los Angeles.”
Seroka said the ports have lost business to the East and Gulf Coasts because importers and exporters have trepidation about these protracted labor negotiations.
“Even though they put out media releases, talked with the President (of the United States), met regularly with the Secretary of Labor and other cabinet members, that’s still not enough to convince the import-export community to keep their cargo here in LA,” Seroka said.
Seroka said one in nine jobs in Southern California are tied to the Port of LA.
He also stated that due to an overall slowdown in global trade, an extended Lunar New Year holiday in Asia, overstocked warehouses, and a shift away from West Coast ports, the LA port moved just under 488,000 container units in February, the fewest since March, 2020.
In February of 2022, close to 860,000 were moved.
Seroka said that during the downturn, the Port of LA is focusing on data and infrastructure projects, improving efficiency and sharpening service levels.
“So when the cargo volume increases, and it will, we’ll be ready,” Seroka said.
The Port of Los Angeles is located in San Pedro Bay, 25 miles south of downtown LA and encompasses 7,500 acres of land and water along 43 miles of waterfront. The Port of Long Beach occupies 3,200 acres of land with 25 miles of waterfront.
In another development, on March 24 a coalition of 238 national, state and local trade associations wrote to President Joe Biden, urging his administration to take a more active role in the labor negotiations.
“Negotiations have been ongoing for over 10 months, with little to no progress towards a new long-term agreement,” the seven-paragraph letter states in part. “It is imperative that the administration work with the parties to quickly reach a new agreement and ensure there is disruption to port operations and cargo fluidity.”
“As we have witnessed, significant cargo flows have shifted away from the West Coast ports,” the letter continues. “That cargo will not return to the West Coast until after a contract is final and approved by both (the PMA and ILWU).”
“The longer (that) there is no ratified contract only increases the probability that some portion of the freight will never return to the West Coast ports,” the letter states.
“We know that significant issues remain for (the union and employers) to resolve,” the letter states near its conclusion. “However, the only way to resolve these issues is for the parties to remain at the bargaining table and actually negotiate. We encourage the administration to provide any and all support to the parties in their negotiations.”
Among the hundreds of signatories to the letter are the U.S. Chamber of Commerce, the National Retail Federation, the Pacific Coast Council of Customs Brokers and Freight Forwarders Associations and the California, Oregon and Washington trucking associations.
Representatives for the Pacific Maritime Association and the International Longshore and Warehouse Union declined to comment when contacted for this story.
Managing Editor Mark Nero contributed to this report.