About 20,000 workers at the 30 U.S. West Coast ports are responsible for handling well over a third of all goods that enter and leave the United States. But these longshore and warehouse workers will be without a contract starting on Tuesday, which means cargo traffic is likely to slow in the coming weeks.
“Trade operations at all seaports along the U.S. West Coast face a summer of uncertainty,” warned a report released Thursday by two trade groups representing retailers and manufacturers. In it, the groups estimated that a 10-day work stoppage at the ports would cost the U.S. economy $21 billion and 169,000 jobs.
The West Coast shipyard workers’ contract with the Pacific Maritime Association (PMA), the group representing port employers, expires on Monday. Negotiations between the PMA and the International Longshore and Warehouse Union (ILWU) have historically been settled within a couple of weeks after the contract expires, in the middle of July, but protracted and ugly showdowns have sometimes happened in the past.
Works slowdowns delay the movement of seaborne goods through the west coast. In 2002, the negotiations lasted for months before the White House intervened to end a 10-day lockout. It took weeks to get port activity back to normal.
In 2008, contract negations went more smoothly but productivity at some ports still dropped by as much as 30 percent. Six years ago, the PMA won concessions that allowed employers to introduce more automated guided vehicles and stacking cranes, reducing the need for manual labor.
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“It is likely there will be some disruption, but how much is very hard to predict,” said the Journal of Commerce, which covers the global cargo shipping industry.
Strikes would be crippling to port traffic, but even slowdowns can force ships to disembark before all the cargo has been moved, adding logistics costs to re-route goods. U.S. Customs and Border Protection (CPB) issued guidelines on Wednesday outlining procedures for diverting cargo.
“CPB’s Office of Field Operations is working diligently to ensure that potentially affected stakeholders and business partners are aware of CBP’s business resumption plans in the event of a strike,” agency spokesperson Erlinda Byrd said to International Business Times by email.
The ILWU officially represents the estimated 13,600 longshore and warehouse workers (excluding the roughly 7,000 walk-ons who get work when it’s available) in Washington state, Oregon and California, but often workers will engage in slowdowns, such as taking extended breaks, to protest if they feel their union representatives in San Francisco are not advocating strongly enough on certain issues.
The ILWU is fighting to keep its current health care benefits despite the estimated annual $190 million increase to their plans under the Affordable Care Act (ACA) that neither side in the negotiations wants to absorb. The union also expects guarantees to its jurisdiction over waterfront activities by other unions or outside contract labor. Last year, the ILWU pulled out of the AFL-CIO after it accused the umbrella union of displacing its members at a new grain terminal in Longview, Washington.
The PMA is pushing back on the ILWU’s jurisdiction claims and wants the freedom to bring in electricians, mechanics and computer technicians to perform duties it says ILUW workers aren’t qualified to do. The employers also want to increase the work day by an hour. The PMA says costs have to be kept in line in order to retain business that could shift to other destinations.
“In 2002, the West Coast ports handled about 50 percent of the total U.S. imported containerized cargo. By 2013, the West Coast ports share had fallen to 43.5 percent,” said a PMA report from April, citing official trade data, just before contract negotiations began. While West Coast port traffic has declined, traffic through ports in other parts of the country have remained steady or have increased in the same period of time, the group said.
The PMA said that a full time longshore worker earns an average of $132,000 a year, but the ILUW points out its current labor contract calls for $35 an hour for the most experienced workers, which would be $72,800 at full time without overtime. The PMA’s annual report (pdf) from 2013 shows that over a third of the workers get about 30 hours a week.