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 February 5, 2015       



Management says negotiations will continue but lockout could occur in 5-10 days.

Excerpt from American Shipper | | FEBRUARY 04, 2015



The chief negotiator for the Pacific Maritime Association said employers on Tuesday made a contract offer to the International Longshore and Warehouse Union that he hopes can help avert a “coastwide meltdown” that he says is just a week or two away.

Jim McKenna, the president and chief executive officer, said that with congestion at terminals increasing and low productivity there could be a gridlock at ports and a lockout in five to 10 days.

“We are going to continue to monitor the network, the system, the vessels and at such point in time that we reach a gridlock situation with any of those three entities. I think our hands will be tied with what we do next. The last thing we want after nine months is to close this place down,” he said.

McKenna’s remarks came during a press conference Wednesday afternoon, the first the PMA has held since it began negotiations with the ILWU on May 12, 2014. The PMA and ILWU are trying to negotiate a new contract to replace a pact that expired on July 1 of last year. The ILWU represents about 20,000 workers at 29 Weat Coast Ports along the West Coast of the United States.

The ILWU issued a statement after the press conference in which it said it “is trying to keep dock employers at the negotiating table to finish an agreement that is ‘extremely close.’”

“We’re this close,” said ILWU President Robert McEllrath, who held up two fingers in a gesture indicating how close the parties are to reaching an agreement. “We’ve dropped almost all of our remaining issues to help get this settled — and the few issues that remain can be easily resolved.”


McKenna said the PMA is proposing a “comprehensive and generous” five year contract and that “we are optimistic that we will get to some sort of sane conclusion here and that this thing will be settled amicably.” In response to a question if the contract was a last, best and final offer, he only said it was a “best offer.” He later said the PMA has concluded its latest offer is “as far as it can go” but McKenna stopped short of calling it management’s final offer, saying that negotiations will continue with the union.

He said PMA has offered to raise the wages of ILWU workers by three percent over each of the next five years and raise the base rate for workers form $35.68 per hour to $40.68 per hour. He noted that ILWU salaries are subject to “multipliers” where workers make more for having certain skills, working night shifts or overtime. McKenna said full time longshoremen make an average of $147,000 per year. The registered workforce will also be guaranteed 40 hours of work.

He said the PMA is also offering to continue the ILWU’s fully-paid health care program that costs employers $35,000 per year, which is in the top one percent in the nation. With a five year contract, he said the Affordable Care Act’s so-called “Cadillac tax” on high benefit health care plan would only come into effect in the last year and have a minimal impact in the next contract.

He said the PMA has offered to increase the ILWU pension 11 percent to $88,800 per year.

McKenna said there are also work rule and jurisdiction agreements, including one that meets the ILWU’s demand to maintain and repair truck chassis.

He said the union has recently made a demand that would allow it to unilaterally remove arbitrators who rule against them.

Repeating that the union is engaging in work slowdowns and refusing to dispatch qualified workers such as yard crane operators, aggravating port congestion, McKenna said the union “has to decide how much longer we are going to pay longshore workers to work slowly. These slowdowns are having the same result as a strike, except the workers are still getting a paycheck. These slowdowns need to stop. The terminals cannot withstand anymore. We are truly close to gridlock.”

“The system can only take so much,” he added. “At some point the system will collapse under its own weight.

“Long term, these slowdowns undermine the credibility of West Coast ports in an environment that is going to become more competitive with the expansion of the Panama Canal and the increase in trade with the East Coast via the Panama Canal,” said Mckenna. “A lot is at stake here — millions of jobs, and trillions of economic impact hanging in the balance. It’s time to conclude these negotiations and get our ports working again.”

The ILWU said of the potential lockout “This is the second time in recent memory that the employers have threatened to close ports at the final stages of negotiations. The union has not engaged in a port strike over the coast longshore contract since 1971, 44 years ago.”

“Closing the ports at this point would be reckless and irresponsible,” said McEllrath. The ILWU urged a federal mediator who joined the talks last month “to keep both parties at the talks until the nearly-finished agreement is concluded.”

If the PMA closes the ports, “the public will suffer and corporate greed will prevail,” said McEllrath.

The union said major powers on the employer side are multi-national corporations who are foreign-owned.

“These foreign-owned companies make billions of dollars and pay their executives millions to do their bidding,” McEllrath added.



Our regulatory experts are monitoring the situation and keeping a close eye on labor negotiations, which began on May 12, 2014. In the meantime we are checking shipment status on a daily/hourly basis to see where our client’s cargo stands in movement towards its final destination. While we can’t control the situation we can keep you informed.


 The information contained in this newsletter has been compiled from various industry newsletters and other public sources. While we use reasonable efforts to furnish accurate and up-to-date information Page & Jones, Inc. is not liable or responsible for the accuracy or reliability of any information contained herein.


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