Will Strike or Lockout Stop Shipping @ WC Ports? ILWU PMA Negotiation

The fear of many is that negotiations between the ILWU and PMA will get heated and slowdowns or stoppages will occur at West Coast ports. If stoppages or slowdowns do occur, it will be costly not only to shippers, but to the U.S. economy as a whole.

The ILWU does not like to give much ground. If issues at Terminal 6 of the Port of Portland are any indication, the union is not above creating slowdowns as a tactic to get its way.

Slowdowns are bad, but even worse is the possibility of a strike. It seems inevitable that the ILWU will have to make some concessions to reach a new agreement with the PMA. The question to ponder is would the union rather strike than make the necessary concessions to reach agreement.

How willing and able the PMA is to make concessions will, of course, also come into play. It would not be unprecedented for the PMA to launch a lockout rather than give in to the demands of the union.

Universal Cargo Management’s own Kelly Liu sent out an email Friday outlining negotiation points from both sides:

What the ILWU Wants:

1. Maintenance of Benefits (MOB).

This is the most likely issue to cause a strike or lockout. Under Obamacare, generous health care plans like ILWU members get will incur a so-called “Cadillac tax” that will come to an annual amount of $190 million to be paid to the US Treasury. PMA is not ready to take on that hefty cost and the ILWU likes its members paying nothing when it comes to health care.

2.       Pension benefit increases for all ILWU membership.

3.       Changing from a combination of man-hours and tonnage to all tonnage due to technology and automation advances that will see man-hours decrease as the basis for assessment payments.

4.       Penalties of $5,000 to $100,000 per day for violations of jurisdiction to employers.

5.       A $5.50 per hour wage increase in year one and another $5.50 per hour in year two plus a flat across-the-board basic wage increase of $2 per hour for all longshore and clerical members.

7.     Overtime beginning at 6 minutes past the eighth hour of work for a minimum of one hour.

8.       Adding May 1 as a paid, no work holiday.

9.      Two more days of vacation time for full-time clerks and longshore labor.

10.       Pay guarantees of 50 hours per week for Class A permanent members and 40 hours per week for Class B membership.

What the PMA Wants:

1.        Health Care reform to prevent the ILWU health care plans costing an additional $190 million in Obamacare “Cadillac tax”.

The email did not mention shared or full responsibility of this health care cost to the ILWU, but it seems clear that the PMA is not prepared to take on this cost all by itself.

2.       Arbitration reform with financial penalties to be levied against the ILWU for non-compliance with arbitration awards issued in favor of the PMA. A $15,000 per hour penalty for failure to implement jurisdiction rulings.

3.       Hold the line on automation and technology contract language as previously negotiated.

The ILWU wants to renegotiate the automation and technology concessions it previously made.

4.       No creep on union work jurisdiction currently held by the PMA, protecting chassis repair jurisdiction among others.

5.       Start a nine-hour work day instead of the current 8-hour day.

The Oregonian pointed to the Associated Press’ reporting of a study by Martin Associates that “Between 2002 and last year, the portion of shipping containers that came into the U.S. through West Coast ports dropped from 50 percent to 44 percent… [and] During that period, imports to ports along the Gulf of Mexico and in the Northeast increased,” supporting that the realities of competition make it unrealistic for the ILWU to get all it wants out of negotiations.

The Oregonian says that’s a reality the ILWU needs to face.

How do you think PMA and ILWU negotiations will turn out? Are we going back on strike watch?