right_division Green SCM Distribution
Bookmark us
SCDigest Logo

Focus: Global Supply Chain and Logistics

Our Weekly Feature Article on Topics Related to Global Supply Chain & Logistics

From SCDigest's On-Target e-Magazine

- Jan. 27, 2015 -


Global Supply Chain News: Union, West Coast Ports Say they Have Reach Deal on Contentious Chassis Issue, While Long Beach Paper Says Enough is Enough

Union Did not Want Chassis Repair and Maintenance to be Moved Outside of the Ports


SCDigest Editorial Staff


Breaking new Monday evening that the International Longshore & Warehouse Union (ILWU), which represents some 20,000 dock workers at West Coast ports, and the Pacific Maritime Association, which represents ports and terminals in the negotiations, have reached a deal on the issue of chassis management, which it turned out was a real stickler in reaching an overall accord.

Many now believe that with the chassis issue out of the way, an agreement on the rest of the remaining issues might be achieve rather quickly.

SCDigest Says:


The fallout from the severe congestion is reverberating across the United States. Retailers, meat exporters, hay producers - the list of businesses suffering losses due to the backlog at the port goes on and on.

What Do You Say?
Click Here to Send Us Your Comments
Click Here to See Reader Feedback

Last summer, not too long after the old contract expired June 30, the two sides announced with little detail that they had tentatively agreed on another contentious issue, relative to the healthcare plan for the union. The existing plan, if left largely in place, would have been designated a "Cadillac plan" under the Affordable Care Act, and subject the ports to huge penalties starting in 2018.

Chassis of course are used to shuttle containers around the port complex. Problems with chassis management - the right number of chassis were never where they seemed to be needed - was a key factor in the congestion and delays at many of the West Coast ports in recent months, especially the giant LA-Long Beach complex.

The chassis issue largely started when the ocean carriers sold off the low margin business over the past few years to third party leasing companies, who operated in a different style and were less worried about keeping shippers happy than the carriers were.

The contractual question apparently had to do with where the maintenance and repair of the chassis would be performed. Would that work be within port areas - manned by union workers - or outside those gates, as it might be reasonably assumed some of the third-party chassis companies might desire to reduce costs, likely with non-union labor?

The Pacific Maritime Association said Monday afternoon that a "tentative agreement was reached on the chassis topic" with the ILWU during contract talks on Sunday, though no details were provided. "We are hopeful that this will allow us to move toward conclusion of an agreement in the near term," said PMA spokesman Wade Gates.

Whether newly appointed Federal mediator Scot Beckenbaugh had anything to do with this new deal is unclear, but the announcement comes just two weeks after he was named to help speed up the negotiations. One of Beckenbaugh's claims to fame is that he played a key role in ending the lockout of NHL players by the hockey team owners in 2013, and agreement that saved the season that year - though barely.

It's not clear what the major issues left to address in an agreement, besides the usual haggling over wages and benefits, though several months ago there were reports that automation at the ports - which would likely reduce union jobs - was another contentious issue. West Coast ports especially are looking to add automation to become more competitive with other ports around the world and in North America, especially with an expanded Panama Canal coming soon that might lead importers to skip a West Coast berth and go instead to Gulf Coast or East Coast ports.

While the ILWU had been reasonably accepting of port automation in recent years, reports were the plans were reaching a level that the union believed required an aggressive response in these negotiations.

(Global Supply Chain Article Continued Below)



Long Beach Press Telegram Says Enough is Enough

Just before the news on the chassis agreement, the Long Beach Press Telegram wrote an interesting editorial says it is beyond time for the two sides to reach a deal.

"Escalating the dispute with slowdowns is causing pain far from the docks, where an estimated $500 billion of cargo is handled annually between the Los Angeles and Long Beach ports," the paper noted. "The fallout from the severe congestion is reverberating across the United States. Retailers, meat exporters, hay producers - the list of businesses suffering losses due to the backlog at the port goes on and on."

The paper added that "There are tens of thousands of peoples' lives directly touched by the dispute but most people have no clue what the hold up is about."

It also said that "Both sides are going to need to make concessions but that should not come at the expense of the economy. Right now public stunts and media campaigns seem to be dominating the debate."
"A shutdown at the Los Angeles and Long Beach ports - the nation's largest port complex - should not be an option," the paper argued.

Do you think a deal will now get done soon at West Coast ports? Do you agree that "enough is enough?" Let us know your thoughts at the Feedback button (email) or section (web form) below.


Recent Feedback


No Feedback on this article yet