Lead Negotiator Speaks with RILA Members on PMA-ILWU Talks

Update on West Coast Port Labor

By [ Evan Armstrong , Jess Dankert ]
04/13/2022

Yesterday, Jim McKenna, President & CEO of the Pacific Maritime Association (PMA), joined a call with RILA members to talk about the upcoming west coast port labor negotiations. A veteran negotiator who has participated in countless labor contract deals, including four PMA-ILWU contracts, McKenna has a unique perspective on the upcoming talks.

PMA represents ocean carriers and marine terminal operations, and the master labor contract between these and the International Longshore and Warehouse Union (ILWU) is slated to expire July 1st. The contract covers about 29 ports up and down the U.S. west coast, and these ports represent about 44% of U.S. container freight traffic. ILWU has a unique position as a “regulated monopoly;” while ports on the Gulf and East Coast are able to employ workers from other sources in addition to unions, West Coast ports must use ILWU labor.

Historically, contract negotiation periods have typically resulted in increased port congestion—ranging from slowdowns to a full shutdown that occurred in 2002. The slowdowns resulting from negotiations in 2014-2015 left an impact that took an estimated 8 months for the economy to recover. This year’s round of contract talks is even more high stakes—and high profile.

McKenna highlighted the unique circumstances heading into this round: “These days, the general public actually knows the importance of the ports and supply chain—and a slowdown will get a lot of attention very quickly on the eve of midterm elections.” Indeed, during the 2014-2015 contract talks, the media breathlessly reported on 25 ships queued at anchor in southern California; during the COVID pandemic, ships at anchor in the San Pedro Bay numbered over 100 at points last year.

What else is different? Unlike some potential supply chain disruptions, this one is clearly visible on the horizon—and on the calendar. McKenna noted, “this is certainly the first time there’s been so much attention ahead of the negotiation, versus in the middle or toward the end.” Last month, RILA and the American Apparel and Footwear Association led 47 other major trade associations in a letter to the Biden-Harris Administration, calling for the Administration to encourage the PMA and ILWU to get started on negotiations sooner rather than later—and potentially to facilitate bringing the parties together if necessary. Soon after this industry letter, several Senators sent a similar message to the Administration.

McKenna touched on some of the topics that will be on the bargaining table—including hours, wages, jurisdiction, healthcare, and working conditions—and noted that “specifically, automation is going to play a key role in the negotiations.” The ILWU has historically been opposed to automation, although ability to automate has factored into the master contract since 2008. RILA has long advocated for modernization and automation, as an essential element for U.S. ports to be competitive on the world stage.

Both sides have been preparing for negotiations to begin in earnest—scheduled for next month. Though the contract doesn’t officially expire for another 80 days, the impending contract negotiations have already been influencing freight movement for months, as shippers attempt to mitigate potential disruption by bringing some shipments forward, or rerouting some volume to Gulf and East Coast ports.

The global supply chain and the U.S. economy can ill afford further disruption resulting from protracted and contentious contract talks on the west coast. RILA will continue to press both sides for a quick and satisfactory resolution, and for government encouragement to expedite the process if necessary.

For more information on RILA's supply chain focus please contact Vice President of Supply Chain Jess Dankert.