With lessons hopefully learned, PMA and ILWU are ready to get the ball rolling on negotiations

While it has been more than a year since the nine month squabble between the Pacific Maritime Association (PMA) and the International Longshore & Warehouse Union came to an amicable conclusion in the form of a new labor contract that runs through June 30, 2019, it appears that the parties are committed to getting in front of things well in advance this time around, when it comes to getting a new deal done before the current contract expires.

This really should come as welcome news, considering the state of disarray and flux things were in between the two parties, and really the global and domestic shipping sectors at large, too, in the months leading up to the eventual inking of a new contract that came to fruition early last summer once the dust finally settled.

As reported by LM, the impasse between the parties went back to July 2014, when their existing contract at the time expired. Among the issues that led to a tense negotiating environment between the pair were differences on several issues, including wages, pensions, health-care benefits, arbitration process rules and operations.

These differences led to nine months of labor unrest and uncertainty that impacted freight flows and port operations in the form of terminal congestion and related supply chain challenges until PMA and ILWU reached their tentative agreement. During this time, emotions on each side ran high, and when prospects of a new deal were at its bleakest point, the sides turned to the U.S. Federal Mediation and Conciliation Service in hopes of helping the sides find a way to come to an agreement.

And when the parties initially reached a deal in late February 2015, industry estimates suggested it would take about two months to clear out the cargo backlog at West Coast ports. At certain points, the two largest West Coast ports, the Port of Los Angeles and the Port of Long Beach had roughly 30 container ships waiting for a berth between the two ports.

The PMA, whom represents shipping lines and terminal operators at 29 West Coast ports, said in a statement this week that earlier this year, “in an effort to provide stability on the West Coast waterfront,” it proposed talks on a contract extension with the ILWU.

This statement came on the heels of a release issued on August 11 by the ILWU indicating that the ILWU, whose members are comprised of roughly 20,000 longshore workers at West Coast ports in California, Oregon, and Washington, have agreed to meet on “the concept of a contract extension,” with the PMA saying that the next step is to schedule a time in the next 30-60 days for PMA and ILWU leadership to begin discussions.

The actual ILWU release noted that more than 100 delegates from 30 West Coast ports met this week to consider an employer request to discuss the possibility of an extension to the current collective bargaining agreement that expires in 2019, adding that by a majority vote yesterday, its delegates voted to enter into discussions with PMA representatives in regards to the concept of a contract extension and then report back to membership.

“The caucus made a tough decision under current circumstances amid a wide range of concerns and opposing views on how to respond to PMA’s request,” said ILWU International President Robert McEllrath. “This is a directive to go and have discussions with the PMA and report back to the membership, and we’ll do just that, with the wellbeing of the rank and file, our communities, and the nation in mind.”

Depending on how these talks progress early on is likely to go a long way in terms of what a new contract looks like and how long it takes to get there. The good news, really, for both sides, as well as shippers and carriers is this: June 30, 2019 is a while from now and provides ample time (hopefully) for both sides to iron out any differences and keep things smoothly operating in and out of West Coast ports.

We all know how things went leading up to the last deal, as it was not all that long ago, with the scars still visible in some ways, with the sides having to turn to the U.S. Federal Mediation and Conciliation Service in hopes of helping them find a way to come to an agreement as well as at certain points, the two largest West Coast ports, the Port of Los Angeles and the Port of Long Beach had roughly 30 container ships waiting for a berth between the two ports.

Those are not good memories for any industry stakeholder to be sure, and by getting a head start on things it is hopefully something that will happen again with the next round of negotiations, but that really will depend on how things play out from here.