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Pessimism clouds West Coast dockworker contract negotiations

Cargo terminal disruptions at U.S. ports; strike vote today and tomorrow for B.C. ILWU members as concerns over potential supply chain disruptions increase
Dockworkers at the BC Maritime Employers Association’s longshore dispatch centre in Vancouver

Prospects for happy endings to West Coast dockworker contract negotiations in Canada and the United States are drifting further off shore, according to some industry analysts.

And that is bad news for any business that relies on transpacific goods movement. It is also regrettable for the ports and terminals that employ unionized dockworkers, because the longer threats of labour disruptions along the West Coast persist, the more container cargo and other freight will be diverted to competing ports in Mexico, the Gulf of Mexico and East Coast North America. Some of that diverted cargo business might never return to the West Coast.

As BIV reported June 6, the International Longshore & Warehouse Union Canada (ILWU) authorized a strike vote for today (June 9) and tomorrow (June 10) for the 7,400 unionized dockworkers and foremen employed at Canada’s West Coast ports. The ILWU decision followed the expiration of a Federal Mediation and Conciliation Service (FMCS) conciliation process that the union had kick-started when it filed a notice of dispute with the federal government following only a handful of preliminary contract discussions with the BC Maritime Employers Association (BCMEA). The contract between the two sides expired at the end of March. That contract took 18 months to negotiate.

Meanwhile, frustration over the lack of progress in securing a new contract for approximately 22,000 workers at U.S. West Coast ports recently sparked temporary closures of port terminals in Long Beach and Oakland. Unionized workers at U.S. West Coast ports have been without a contract since July 2022.

The “stop work meetings” that resulted in the container terminal closures at U.S. ports support suspicions outlined in a June 6 Transport Intelligence (TI) logistics briefing from Thomas Cullen, who noted that “despite the reassurances from the management over the past few months, the U.S. West Coast port labour negotiations seem to be going badly.”

According to IT’s chief analyst, pay is atop the list of contentious issues in the U.S. dockworker contract negotiations, but Cullen added that port labour efficiency and longshore job preservation are also key concerns.

However, he downplayed the threat of a full U.S. West Coast strike in part because of the political pressure that would be brought to bear on longshore unions.

“What is possibly more likely,” he predicted, “is a campaign of lower-level disruption reducing the efficiency of operations in terminals but just short of a complete stoppage.”

It is a cautionary tale of protracted contract negotiations.

As Pat Penfield, supply chain professor and director of executive education at Syracuse University’s Whitman School of Management, pointed out, the Pacific Maritime Association (PCA), which represents the port employers in the negotiations, should have concluded the contract negotiations last fall.

“By allowing the negotiations to drag on through this summer, they have put themselves in an unenviable situation from a negotiation standpoint. This is the start of the busy season for the West Coast ports and many of their customers cannot afford disruptions to their supply chains. I would expect to see even more disruptions by the ILWU in the next several months to apply even more pressure on the PCA in their contract negotiation. Sadly, both groups are hurting themselves from a business opportunity standpoint.…West Coast port customers have been and will continue to reroute freight to East Coast ports.”

Both the BCMEA and ILWU Canada have declined to comment on the current state of contract negotiations.

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