Contract negotiations between the International Longshore and Warehouse Union (ILWU) and the Pacific Maritime Association (PMA) officially started on May 10th, 2022, before the previous contract expired but continue today. As we near the one-year anniversary of negotiating and numerous job actions by union members causing disruptions at terminals across the West Coast, one can wonder what is stopping the two parties from coming to an agreement.

While we can’t detail every issue holding up the contract negotiations, we will try to explain in detail two major issues that are being discussed and the view from both sides.

Automation

One of the biggest issues holding up contract negotiations is the subject of automation, a longstanding bone of contention for the ILWU and a major goal for the PMA.

The argument is that automated terminals are necessary for the United States to stay competitive with other ports in the world, but the ILWU and its’ members are worried that it will eliminate jobs for thousands of men and women.

Currently, there are two automated terminals at the Los Angeles and Long Beach ports, but the PMA wants more automated terminals along the West Coasts and says that it would increase productivity, give union members higher wages, and reduce the various port’s carbon footprint.

Union members claim that automated technology at the ports is killing jobs and stripping away worker power and claim that the new technology isn’t even leading to increased productivity. It’s worth noting that, despite the union’s adamant disapproval of automation, they explicitly accepted machine-automated technology in their 2008 labor agreement.

PMA, however, insists that automation won’t kill jobs, in fact, the PMA commissioned a report showing that the West Coast’s two automated terminals, TraPac and LBCT, saw a 31.5% increase in paid hours for dockworkers, in addition to processing twice as many containers as non-automated terminals.

As you would expect, the union’s researchers dispute these findings. Their researchers claim that the influx of shipping volume between 2020 and 2022 masked the job losses at both terminals. According to the union’s research, 580 jobs were eliminated at the two ports in 2020 and 2021.

In a recent development, both parties released a statement last week saying that they came to a tentative agreement on “certain key issues” but not going into detail about what issues the tentative agreement included. However, an article posted on the Wall Street Journal website said they had a source close to the negotiations that told them the two sides had a tentative agreement regarding none other than automation.

If the automation issue is resolved then the next big hurdle is wages and benefits, nevertheless, an agreement on automation is a huge step forward.

Wages and Benefits

How much the average ILWU member gets paid is another major hurdle the two parties need to come to an agreement on. Obviously, the ILWU wants to get their members a substantial raise but the PMA believes that dock workers already get a “world-class wage and benefits” and has to take into consideration the slowdown in cargo volume this year and their plans to automate more port terminals which require a massive investment.

According to the PMA, under the current contract, 15,500-plus union members earn on average $195,000 a year working full-time. That is three times the U.S. median income and in addition to that hefty paycheck, ILWU members enjoy a benefits package that averages $102,000 in value. This package includes full employer-paid healthcare, pensions, retirement savings plans, and guaranteed pay of up to 40 hours per week even when work isn’t available.

Many of you reading this article might think that the union member’s wages are more than fair but according to ILWU President Willie Adams, he isn’t apologizing for what his members make and plans on asking for more.

“We make no apologies for achieving wages that allow workers to provide for their families, have retirement, and the healthcare these difficult and dangerous jobs require,” Adams wrote, noting that “decades of previous negotiations have made longshore jobs good blue-collar jobs.”

ILWU argues that their members haven’t had a raise in years and we’re coming out of a period where ocean carriers and terminal operators are recording record-breaking profits. When you look at the union member’s pay, in comparison to the shipping industry’s profits, it’s really not that unreasonable.

In 2021, PMA paid out $2.26 billion in wages and another $1.55 billion in benefits according to its annual report, but that’s hardly a drop in the bucket considering the shipping industry made $150 billion in profits that year. Because these dockworkers literally work at the country’s choke points, they have a lot of leverage when unionized and it might just be in PMA’s best interest to just give ILWU their raise.

Conclusion

While we continue to wait for a multi-year contract to finally be signed, rest assured that ClearFreight is ready to help, as we have been for the past 50 years putting customers forward and building lasting relationships. Contact us today to learn more about what customer forward means to us and how our specialized supply chain solutions can help make logistics easier for you. Follow us on Linkedin and Twitter to stay up to date with industry news and alerts.