The contract, between the Pacific Maritime Association and the International Longshore Warehouse Union (ILWU), which covers all of the ports along the West Coast, will expire on June 20, 2014. Negotiations to replace the six-year agreement that expires next year are already expected to be difficult and protracted.
Some of the issues that could be troubling include jurisdiction as unions work to protect and expand their turf from non-union and other union labor as sophisticated automation continues to reduce core job opportunities. Non-ILWU labor now working at some 30 yards up and down the West Coast will likely come up during next year’s talks.
In addition, the U.S. West Coast is losing market share to Canada. Canada’s west coast container market share grew from 7.5 percent in 2000 to 13.9 percent last year. Total container volume at Los Angeles-Long Beach increased just 1.5 percent in the first half of 2013. The expansion of the Panama Canal will likely divert at least some cargo to the East and Gulf Coasts, and some lines are using the Suez for their largest Asia-to-U.S. tonnage. Widespread terminal overcapacity exists as well, particularly in Oakland and the Pacific Northwest.
Currently, there is a jurisdictional and contractual battle going on involving Pacific Northwest grain terminals, which is set for serious confrontation, and ultimately could influence West Coast port negotiations next year. Nine elevators in the Pacific Northwest load deep-water bulkers with wheat, corn, and soybeans from the upper Midwest and Idaho, Oregon, and Washington state. Those operators pay similar wages and benefits as their container operator counterparts. However, as these facilities have become more sophisticated, the operators are balking at traditional union work practices.
After a violent confrontation last year, one of the operators signed a contract with ILWU that achieved significant work rule changes at its new $200 million elevator. The other operators want similar deals that, although preserving ILWU work, undermine the union’s traditional power. Two elevators, one in Portland and one in Vancouver, Washington, in the spring locked out the ILWU over other issues and have been working the elevator and vessels via management and temporary non-union employees. Serious confrontation could erupt with the fall harvest and increased vessel activity.
The ILWU has filed a series of unfair-labor-practice petitions pertaining to the lockouts with the National Labor Relations, but no rulings has yet been made. Railroad workers, tug boat crews, and vessel pilots are bound by their own contracts not to cross picket lines, so the ILWU may have very few options to solve this issue. If the union were to be required to accept these elevator-type agreements at other terminals, it could embolden the ILWU leadership to be much more aggressive in the container talks in order to maintain support of their rank-and-file members.
