US retailers and manufacturers are facing mounting delays at West Coast ports as tensions rise between unionized dockworkers and their employers, as the two sides have been locked in labor talks for more than a year.
Supply Chain Digest Says...
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The International Longshore and Warehouse Union, which represents about 22,000 dockworkers, initially sought a contract that would double wages over the life of the six-year contract.
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According to the Wall Steet Journal, the labor disruptions have forced some cargo-handling facilities to close morning or afternoon operations or limit the number of cranes that can work to load and unload ships.
That said, the job actions so far have been targeted and relatively limited in scope.
However, past contract talks have started out with sporadic disruptions that developed into broader actions that caused large backups of container ships.
Perhaps most seriously, The Pacific Maritime Association (PMA), which represents 29 West Coast ports, terminals, and warehouses, claims that significant labor unrest by the International Longshore and Warehouse Union shut down areas at the Port of Seattle over the weekend.
In a statement released on Twitter June 9, the PMA accused the ILWU of “coordinated and disruptive work actions,” related to the union’s contract negotiations.
But the union challenged those statements, accusing the PMA of using the media in an attempt to influence the process.
ILWU President Willie Adams said that “Despite what you are hearing from PMA, West Coast ports are open as we continue to work under our expired collective bargaining agreement.”
The Journal also reports that contract negotiators have reached agreements on two key issues: benefits and the use of automation on the docks, the latter a huge issue in coming to an agreement during the signing of the current contract.
But they apparently cannot resolve differences relative to wages.
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The International Longshore and Warehouse Union, which represents about 22,000 dockworkers, initially sought a contract that would double wages over the life of the six-year contract.
The PMA says ports, carriers and terminals cannot afford such a large increase in dockworkers pay when full-time employees already make an average of around $200,000 annually.
But they are offering significant increases in pay, it is reported, including, including a bump of more than 10% in the first year of a new contract.
If the sides can’t reach an agreement soon, they may call on the Biden administration to intervene, such as by appointing a mediator. But we’ll note Labor Secretary Julie Su on a recent call with employers, suggested ocean carriers should share more of their profits with workers.
And we will also note that some shipping industry officials worry raising labor costs at West Coast ports will increase prices and push importers and exporters to more heavily utilize ports on the Gulf and East coasts, exacerbating an existing trend.
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