Talks are getting increasingly tense between West Coast cargo-handling companies, container shipping lines, and dockworkers. At the heart of the negotiations are automation and pay, two issues that have driven the core of most negotiations over the past decade. The US’s busiest container port complex is at Long Beach and Los Angeles. The tension is growing, and some importers have already begun to reroute cargo to East Coast ports. Seaports from Washington state to California will be adversely affected if a resolution cannot be ironed out.
Labor Secretary Marty Walsh released a statement indicating the discussions had been going smoothly. In fact, in late June the Pacific Maritime Association and the International Longshore and Warehouse Union (ILWU) met with President Biden to provide an overview of their conversations. Soon thereafter they released a statement indicating a strike is neither imminent nor are they preparing for a potential lockout. Regardless, the Biden administration is rightly concerned as West Coast backlogs ahead of upcoming holiday shopping would be a terrible return to the dark logistical nightmares Covid brought upon us.
The ILWU represents roughly 22,400 dockworkers over 29 ports. Negotiations with the Pacific Maritime Association have been occurring for approximately 6 weeks. In the world of multi-year contract negotiations, this is not a lot of time. The contract expired on July 1st but the union can extend the agreement for an additional 30 days so the talks can continue. The other option would be to have its members work without a contract but should any labor issues emerge that would surely bring about slowdowns or worse.
In a previous contract, the ILWU had agreed to allow automation. Yet, in practice, the addition of robotics on the docks has not gone smoothly. Of the 13 Southern California container-handling facilities, two have been partially or fully automated and only two others have begun to introduce automation. A group representing maritime employers released a report in May lauding the efficiencies of automation. Specifically, the report claimed that the Southern California reports with the most advanced automated facilities were processing containers nearly twice as fast as their non-automated neighbors. A counter-report released by the union differed, stating the evidence is not 100 percent clear that automation alone results in more streamlined or efficient operations.
Contradicting narratives are standard in contract negotiations. In terms of pay, the employer’s report noted that an average dockworker with over 5 years of experience earned just shy of $200,000 per year ($190,000) in 2019. The union report countered that the average dockworker in Long Beach and Los Angeles made $89,950 in 2019 and that these dockworkers make up nearly three-quarters of the entire coastwide workforce.
The two sides are jockeying for leverage, but the wider public likely cares less about automation and wages. Diverting cargo away from the West Coast will have ripple effects for all consumers. Let’s hope this gets resolved before July 31st.
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