Labor Sends West Coast Ports Deal to Members for Approval

This week, leadership of the International Longshore and Warehouse Union (ILWU) recommended approval of a five-year contract with the Pacific Maritime Association (PMA). The new contract will now be voted on by rank-and-file members of the ILWU, and the results will be announced on May 22, 2015. The contract is very likely to be ratified by the ILWU membership.

The previous long-term contract between the ILWU, whose members work at 29 ports on the U.S. West Coast, and the PMA, whose membership consists of cargo carriers and terminal operators, expired on July 1, 2014. Slow processing of cargo during the difficult contract negotiations led to a significant freight backlog at

West Coast ports, particularly at the ports of Los Angeles and Long Beach, CA. The last ships awaiting unloading in Long Beach, CA as a result of the backlog during negotiations will be unloaded within two to three months. West Coast ports are the key entry points for cargo arriving from Asia. However, due to the shifts in shipping habits during the cargo processing slowdown as well as to the upcoming opening of an expanded Panama Canal, East Coast ports dramatically increased their market share for those imports. Moving forward there will likely be significant demand for new shipping routes directly from Asia to U.S. East Coast and Gulf Coast ports. Experts estimate that as much as 15 percent to 20 percent of the cargo that was lost by West Coast ports during the recent slowdown may be permanent once the Panama Canal expansion project is completed. In an effort to recover market share and avoid future labor strife, the PMA membership may pursue increased automation at port facilities.