Early Contract Extension Could Occur with Dockworkers at East & Gulf Coast Ports

One thing has modified at U.S. ports. And it’s a superb factor for shippers.

The Worldwide Longshore & Warehouse Union (ILWU) agreed to an early contract extension in August that brings port stability to the West Coast ports by way of July of 2022, and now the Worldwide Longshoremen’s Affiliation (ILA) could do the identical factor on the East and Gulf Coast ports.

What’s superb, is this could by no means occur historically.

There’s an unofficial (however probably official) coverage of the dockworkers unions to not prolong contracts or conform to new ones earlier than the earlier contract has expired.

This observe preserves the unions’ strongest negotiating weapons in opposition to employers on the ports: strikes, risk of strikes, and labor slowdowns.

After all, the issue with strikes and slowdowns on the ports is that they trigger importers, exporters, and the economic system as a complete to endure.

Fortunately, we haven’t truly seen a full scale strike on the East and Gulf Coast ports in a long time. Nonetheless, we had been in a full scale strike watch again on the finish of 2012 main into 2013 when one was scheduled and the contract negotiations between the ILA and United States Maritime Alliance (USMX) wanted mediation to get accomplished.

Issues have been worse not too long ago on the West Coast. Throughout the contentious 2014-15 contract negotiations, labor slowdowns and mini lockouts left export produce rotting on the docks and stored import items from hitting cabinets throughout the vacation procuring season. This brought about many shippers to divert items from the West Coast to East and Gulf Coast ports.

A few of that market share reverted again to the West Coast; nonetheless, East and Gulf Coast ports have retained some market beneficial properties. However with the ILWU agreeing to an early contract extension and the present ILA contract expiration arising subsequent yr, the East and Gulf Coast ports are at risk of dropping their beneficial properties.

That’s in all probability why we’re seeing a story from the Journal of Commerce (JOC) posted yesterday (November eighth) headlining ILA, USMX to debate multiyear contract extension. Senior Editor Joseph Bonney writes:

The Worldwide Longshoremen’s Affiliation (ILA) and its East and Gulf coast employers plan to satisfy in early December to debate a contract extension that would stretch past the five-year deal that West Coast dockworkers not too long ago authorised.

…

ILA president Harold Daggett has summoned the union’s wage scale committee, which contains greater than 150 native delegates, to satisfy with USMX representatives Dec. 5 and 6 in Hollywood, Florida, to debate contract points.

Union and administration officers have been tight-lipped however reportedly are discussing a contract extension that will run so long as six years, to September 2024.

In 2015, whereas monetary losses shippers suffered throughout the contentious ILWU contract negotiations had been nonetheless contemporary, the ILA and USMX truly introduced plans to open early discussions on a long-term contract.

I wished to consider such early contract negotiations would occur, however I used to be skeptical that it would simply be a transfer to realize extra market share from shippers feeling betrayed by the congestion on West Coast ports after the ILWU and Pacific Maritime Affiliation (PMA) pledged to maintain cargo shifting throughout contract negotiations.

It appeared I used to be proper to be skeptical. A pair years handed with none ahead motion on negotiations.

Then a shock ILA labor slowdown hit the Port of Charleston in response to an automatic gate system and it regarded like we’d see a contentious and expensive struggle over automation throughout contract negotiations subsequent yr when the present contract expires as a substitute of a easy or early transition to a brand new or prolonged contract.

That makes this information of motion towards an extension earlier than the present contract expires much more thrilling.

Maybe as a substitute of an remoted occasion of an early extension between the ILWU and PMA, such ahead pondering may turn into the brand new norm. That will be significantly better than the normal development of expensive and contentious negotiations each time a dockworkers union contract expires on the ports.

After all, nothing occurs till it occurs, don’t depend your chickens till they’ve hatched, and different such cliché however smart sayings apply right here. Automation and different dockworker contract issues nonetheless exist and lots of is not going to wish to surrender the leverage the unions acquire by permitting contracts to run out.

Shippers needs to be inspired by this step towards an early contract extension however mood hopes till an prolonged or new contract truly does occur on the East and Gulf Ports.