Although the Pacific Maritime Association (PMA) and International Longshore and Warehouse Union (ILWU) settled on contract terms months ago, and ratified the agreement in May, the effects of their long and stressful negotiations process still haunt West Coast ports.
After lengthy discussions between the PMA and ILWU through much of 2014 and early 2015 led to unprecedented slowdowns at U.S. West Coast ports, the announcement of an agreement that was eventually ratified was a huge relief for everyone. However, in the two weeks since the contract came into effect, American Pacific operations haven't been a bed of roses. Some experts, such as Bill Mongelluzzo, a senior editor at the Journal of Commerce, believe that operations at West Coast ports won't be significantly enhanced by the agreement, because of its tepid approach to change relative to past contracts.
The most recent agreement also the least impactful?
The 2002 agreement between the ILWU and PMA, for example, was a game-changer for West Coast port operations. At the heart of those labor negotiations was the introduction of more computerized processes into regular West Coast port operations. The ILWU was opposed to automation taking over dockworkers' jobs and the lay-offs that would follow. Eventually, the agreement included allowances for the use of optical scanners, remote cameras and various freight tracking equipment, as well as other digitized procedures.
In exchange for the ILWU allowing computerization into some aspects of West Coast port operations, the PMA agreed to ensure that all jobs, existing or new, would be union-covered. Computerization was expected to eliminate 400 clerks jobs, but the management group agreed to find them other positions. Additionally, savings from automation were directed toward ILWU pensions. This agreement changed many things for West Coast ports, similar to the next one in 2008.
It was then that terminals were given the unrestricted right to introduce automation as they pleased, a measure believed at the time to be a job-killer. Despite this, negotiations between the two groups moved along fairly peacefully. In 2008, after discussions had ended and the agreement had been ratified, computer-controlled ship-to-shore cranes, unmanned horizontal ground transportation and automated stacking cranes were all brought to ports.
"American Pacific operations haven't been a bed of roses."
The most recent contract between the PMA and ILWU, by comparison, does much less to improve the way operations move forward at West Coast ports. One of the main points of contention this year was who would pick up the tab on new Obamacare provisions. Ultimately, the PMA agreed to cover health care costs, as it always had. Wages were increased, but were also not a point of significance through the discussions. Besides health care, the most serious issue had been chassis maintenance and repair. The PMA, which for years had paid for chassis, is essentially done providing them at this point, having sold that business to leasing companies, and the ILWU had been worried that it would lose control over maintenance and repair. Union members were eventually granted control over maintenance and repair. Further disagreements over chassis were referred to the Federal Maritime Commission (FMC) to suss out. The chassis maintenance and repair provision in the contract has already led to delays at some ports.
A ratified contract does not mean refreshed port operations
Without sweeping overhauls, was this year's contract not enough to lift West Coast ports out of the funk partially incurred by contentious negotiations through 2014? Well, the issues that plagued terminals during the negotiations haven't been completely eliminated, at least not yet. At West Coast ports, total container volume fell 6 percent from April 2014. Containerized imports in that same month fell 2 percent, and exports were 11 percent lower than they were one year ago in April. It wasn't just that month, though, the first third of 2015 as a whole represented a slump for West Coast ports. Keeping in mind that just under two of those months went by without any sort of agreement, volumes through the first four months of the year were also down. Ports up and down the West Coast – which handle nearly half of total U.S. container volume – have yet, it seems, to taste the fruits of a newly ratified agreement.
In Oakland, the uncertainties left in the wake of the most recently ratified PMA-ILWU contract are already causing problems. On Sunday, May 31, for example, the night shift at the port was shut down following a disagreement between dockworkers and terminal operators. The conflict between ILWU Local 34 and the operators began because the union members, allegedly, did not adhere to new dispatch procedures for the Sunday night shift. Prior to the new contract, terminal operators had to let ILWU Local 34 know how many clerks were needed by Saturday morning, but the employer noted difficulties determining its needs so soon, and so the procedure was changed to allow operators to inform the union on Sunday morning.
Each group accused the other of not following the new procedures for the May 31 Sunday night shift, reminiscent of the mud-slinging that characterized the latter-half of negotiations between the ILWU and PMA. The operators group noted that this was one of a number of work stoppages in Oakland this week, where workers are known to take a more hardline approach. Whether the ratified contract between the PMA and the ILWU is thorough enough to effect substantial positive change remains to be seen, but thus far, things are moving along slowly, if at all.