Date: Friday, September 1st, 2023
Source: Sourcing Journal
Two months after striking a tentative six-year contract agreement with their maritime employers, West Coast union dockworkers officially gave the deal a stamp of approval.
Members of the International Longshore and Warehouse Union (ILWU) voted 75 percent in favor of ratifying the new agreement. The contract, already approved by the Pacific Maritime Association (PMA) member companies, is retroactive to July 1, 2022 and runs through July 1, 2028.
Voting results were certified Thursday by the ILWU’s coast balloting committee, which was chosen by caucus delegates elected from each of the 29 West Coast ports. The vote also comes weeks after the union’s Canadian branch agreed to ratify a four-year labor contract after a 13-day strike at British Columbia ports in July.
The ILWU has declined to report terms of the agreement, but The Wall Street Journal reported that the deal includes a 32 percent pay increase over the span of the contract as well as a one-time “hero bonus” for working through the early days of the Covid-19 pandemic.
“This contract provides an important framework for the hard work ahead to overcome new competitive challenges and to continue to position the West Coast ports as destinations of choice for shippers worldwide,” said Jim McKenna, PMA president and CEO, in a statement. “From San Diego to Bellingham, these ports have long been the primary gateways for cargo coming into and leaving the United States, and our interests are aligned in ensuring they can effectively, and efficiently, handle the capacity growth that drives economies and jobs.’’
The tentative agreement was reached June 15, with assistance from Acting U.S. Secretary of Labor Julie Su.
“The negotiations for this contract were protracted and challenging,” said ILWU International President Willie Adams in a statement. “I am grateful to our rank and file for their strength, to our Negotiating Committee for their vision and tenacity, and to those that supported giving the ILWU and PMA the space that we needed to get to this result.”
Port of Los Angeles executive director Gene Seroka praised Adams and McKenna, saying “the collective bargaining system worked” due to their leadership.
“This contract brings long-term stability and confidence to our customers as we re-double our efforts to bring more cargo back to the Port of Los Angeles, the premier gateway to and from the Pacific Rim,” Seroka said in a statement.
Port of Long Beach CEO Mario Cordero touted that the ratified deal would have a huge benefit to the wider U.S. economy, with the ports bringing in 44 percent of inbound containers in July 2023, according to data from the McCown Report, a monthly report of container volume at 10 major U.S. ports,
“The goods movement workforce and terminal operators provide the top-notch service that brings cargo from around the world to our docks. We’re proud to partner with the ILWU and PMA to move cargo through the nation’s largest trade gateway here in the San Pedro Bay,” Cordero said. “This contract will pave the way for the San Pedro Bay ports complex to competitively and sustainably keep the nation’s cargo and the nation’s economy moving.”
The concerns over potential labor disruptions like walkouts, which persisted ahead of the tentative agreement, have factored into some of the shift in container shipments to the East and Gulf Coasts.
According to the July McCown Report, the 12.5 percent year-over-year decline in inbound container volume across U.S. ports was weighed down by the West Coast, which saw a decline of 21 percent. The East and Gulf Coast ports saw just a 4.4 percent decline.
Overall, the West Coast ports have registered drops in inbound container volume for 19 of the last 23 months, the report said.
A major beneficiary of the shift has been the Port of New York and New Jersey, which was the nation’s busiest seaport in July 2023, moving 725,479 20-foot equivalent units (TEUs), its highest monthly total since October 2022.
The port outpaced the Port of Los Angeles, which is traditionally the gateway with the most throughput nationwide. The California port moved 684,291 TEUs in July, down roughly 26.9 percent from last year as cargo shipments declined compared to last year’s record month.
In late 2022, the east coast port had a brief four-month stretch when it moved the most total TEUs of all U.S. ports, namely due to aftereffects West Coast port congestion that persisted throughout 2021 and 2022. But today, it may represent another sign that shippers are diverting more product east.
In July the seaport saw its cargo volume jump by 16.2 percent compared to the month prior, driven by what the ports called “dramatic” increases in shipments of apparel, toys, games and sporting equipment, which combined saw a 40 percent increase.
The port also moved 9.4 percent more cargo this July compared to pre-Covid July 2019 numbers.