ILWU Ratified Contract – But Will the Horrible Process Change?!

After just over a year, the contract negotiation process between the International Longshore & Warehouse Union (ILWU) and the Pacific Maritime Association (PMA) has come to an end.

The ILWU ratified the new contract between the PMA and themselves on Friday, May 22nd.

The PMA just ratified the contract days before on Wednesday, May 20th.

ILWU slowdowns and mini-lockouts from employers in retaliation had things so backed up at the ports during negotiations that imported holiday products never hit store shelves and U.S. agricultural exports rotted on the docks.

The ILWU press release announcing the ILWU members’ vote to ratify the 5-year contract by 82% quoted the ILWU president saying something we all already knew:

“The negotiations for this contract were some of the longest and most difficult in our recent history,” said ILWU International President Robert McEllrath.

But why?

Why were these negotiations so long and difficult? Why did shippers and the U.S. economy need to suffer as the PMA and ILWU worked out a new contract?

The sad fact is that there is no good answer to that question. It was long and difficult and fraught with union slowdowns and employer retaliations because that’s the way longshore contract negotiations on the West Coast are done.

Seriously.

It’s as infuriating as when you were a child and asked your parents why only to get the answer, “Because we said so.”

Consider this excerpt from a Bill Mongelluzzo article in the Journal of Commerce (JOC) that says the new contract is “no game changer” right in the title:

What is so disconcerting about the 2014-15 negotiations, compared to those of 2002 and 2008, is that those contracts brought significant change to West Coast ports. The 2002 contract opened the door for unlimited use of computerization and information technology at marine terminals. ILWU marine clerks fought those changes because they knew that loss of jobs would result. Employers were equally adamant that productivity could not advance without the use of computers and a free flow of information.

The 2008 contract was potentially the most revolutionary of the last three contracts. It gave individual terminals the unrestricted right to introduce automation —computer-controlled ship-to-shore cranes, unmanned horizontal ground transportation and automated stacking cranes in the yard — that could eliminate 40 to 50 percent of the ILWU general longshore jobs. The 2008 contract negotiations were relatively peaceful.

The contract that was ratified Friday is unremarkable in most every aspect. Going into the negotiations, the main point of controversy was supposed to revolve around who would pick up the tab for the estimated $150 million a year in additional medical costs associated with the so-called Cadillac tax in the Affordable Health-Care Act. In retrospect, the PMA had always paid 100 percent of the dockworkers’ healthcare costs, so why should the ObamaCare provision be any different? The PMA agreed to pay it.

Agreement on the Obamacare’s Cadillac tax between the PMA and ILWU was announced all the way back on August 26th, leaving the industry feeling positive about the progression of the contract negotiations.

I even posted a UCM blog titled “2 Reasons the ILWU PMA Contract Negotiations Will Resolve Soon” but it didn’t take long for the negotiations to fall apart like negotiations between the Detroit Lions and Ndamukong Suh.

There were, of course, sticking points in the contract negotiations. Jurisdiction over repair and maintenance of chassis and then the ILWU wanting to get rid of arbitrators who ruled against them are the issues that got reported.

Are these issues worth pushing shippers away from West Coast ports? Because that’s what happened.

Andrew Edwards, at the end of his Press-Telegram article about ILWU’s ratification of the contract, quoted Mark Hirzel, president of the Los Angeles Customs Brokers and Freight Forwarders Association:

Hirzel said West Coast dockworkers do their jobs well, but the prospect of future disruptions has motivated some shippers to divert their goods to other destinations.

“We’ve definitely lost freight, and I know customers that have proudly told me that they have 100 percent rerouted their containers from L.A. and Long Beach,” Hirzel said. “What shippers have said is, they’re willing to pay more for greater predictability.”

Apparently, both the PMA and ILWU recognize there is a need for change in the horrible process of longshore contract negotiations on the West Coast.

The JOC article quoted above also pointed out the PMA and ILWU addressing a problem with the current way contract negotiations are happening:

PMA President Jim McKenna told JOC.com at an event in New York last week the current process of negotiating contracts “is not sustainable.”

In an address to a Toy Industry Association meeting in Long Beach on Thursday, Bobby Olvera, president of ILWU Local 13 in Southern California, said he is a firm believer in action. When disputes arise on the waterfront, both parties should address them immediately rather than letting them fester until the next round of negotiations five years later.

But didn’t the PMA and ILWU see problems with the process back in 2002 when union slowdowns and employer lockouts resulted in the permanent loss of shipping business to West Coast ports?

What’s to say we won’t be going through this whole thing again in 2019? The process needs to change now. Not four years from now. When are we actually going to see that change?