Following nine months of negotiations and a contract dispute that has impacted international shipping worldwide, The Pacific Maritime Association (PMA) and the International Longshore and Warehouse Union (ILWU) yesterday (Feb. 20, 2015) announced that they have reached a tentative agreement on a new five-year contract covering workers at all 29 West Coast ports.
In a joint statement, the two groups said that the deal was reached with assistance from U.S. Secretary of Labor Tom Perez and Federal Mediation and Conciliation Service Deputy Director Scot Beckenbaugh.
The parties said that they will not be releasing details of the agreement at this time.
The agreement is subject to ratification by both parties.
“After more than nine months of negotiations, we are pleased to have reached an agreement that is good for workers and for the industry,” said PMA President James McKenna and ILWU President Bob McEllrath in a joint statement. “We are also pleased that our ports can now resume full operations.”
“We congratulate the ILWU and PMA for finally coming to agreement on a new labor contract. It is now time for the parties to quickly ratify the deal and immediately focus on clearing out the crisis-level congestion and backlog at the ports,” said Matthew Shay, President and CEO of the National Retail Federation, commenting on the news in a statement.
“The congestion, slowdowns and suspensions over the last few months have had a significant economic impact on the entire supply chain and those who rely on the West Coast ports to move their goods and products around the world and throughout the country. The agricultural, manufacturing, retailing and transportation industries have all suffered due to the nine-month long contract negotiations,” Shay continued.
“As we welcome today’s news, we must dedicate ourselves to finding a new way to ensure that this nightmare scenario is not repeated again. If we are to truly have modern international trade, supply chain and transportation systems, we must develop a better process for contract negotiations moving forward. We must commit whatever resources necessary to ensure that this will not happen again,” he said.
Following the protracted dispute that culminated in a four-day shut down of the West Coast ports earlier this month, port executives and business leaders throughout the country demanded that the federal government step in to end the impasse in negotiations between the International Longshore and Warehouse Union and the Pacific Maritime Association. U.S. Secretary of Labor Thomas Perez met with the representatives of the ILWU and the PMA in San Francisco on Tuesday and Wednesday of this past week, to urge the sides to settle the differences at the bargaining table.
Federal Mediation and Conciliation Service Acting Director Allison Beck issued a statement on the tentative agreement, commenting, in part:
“I am extremely pleased to announce today that after extensive negotiations and mediation provided by the FMCS and with the support and assistance of Secretary of Labor Tom Perez, Secretary of Commerce Penny Pritzker, and Los Angeles Mayor Eric Garcetti, representatives of the ILWU and PMA have tentatively agreed to a new contract, resolving all outstanding issues that divided them and that have affected operations at U.S. west coast ports.
“Due to the complexity of the issues the parties had to address, these have been lengthy and at times difficult negotiations. The parties persevered over a long and challenging process and were ultimately successful in averting any further situations that could have been disruptive to shipping operations and to the nation’s economy.”
“As a result of their efforts, shippers can expect that normal operations will be restored as soon as possible at our nation’s west coast ports,” said the Beck statement.
The Federal Mediation and Conciliation Service, created in 1947, is an independent U.S. government agency created to preserve and promote labor-management peace and cooperation. The agency provides mediation and conflict resolution services to industry, government agencies and communities.
The ongoing contract dispute has had a “horrendous impact” on the productivity of the US West Coast ports, which have recorded significant drops in their monthly cargo volumes, reports the World Maritime News.
World Maritime News, on Feb. 19, reported that the combined container volumes at the ports of Seattle and Tacoma fell 13% in January, continuing a trend that started in November. Containerized imports at Puget Sound gateway had plunged 21%, with exports down by 7%.
Container volumes at the Port of Long Beach dropped by 18.8% in January, with imports down by 23.5% from January 2014. The Port of Oakland reported cargo volumes down by 32%.
The prolonged dispute has also begun to impact the travel retail industry. Manufacturers contacted by TMI said that production has been hampered by an inability to obtain key components, especially from Asia.