ILWU Labor Action Occurs as Contract Negotiations Look Bad

Labor action from West Coast dockworkers is looking more and more likely to disrupt supply chains. In fact, local action, including a port security guard strike authorization, have already taken place.

The potential of a rail strike pulled attention away from the International Longshore & Warehouse Union’s (ILWU) contract negotiations with the Pacific Maritime Association (PMA). On Thursday last week, a tentative contract agreement between the railroads and the two largest rail worker unions relieved the fear of U.S. supply chains shutting down on the following day, allowing focus to turn back to the ILWU’s stalled contract talks. Things are not fully resolved on the rails, but the situation there has generally moved in a positive direction while the situation on the docks is trending in a negative one.

Concerning Situation

Peter Tirschwell, Vice President, Maritime & Trade, S&P Global Market Intelligence, has not surprisingly been keeping a close eye on the situation at the docks, writing articles about what’s going on with the ILWU and their contract negotiations in the Journal of Commerce (JOC) and the Wall Street Journal (WSJ).

As I’ve done in Universal Cargo’s blog, Tirschwell has warned of the supply chain disruption threat the ILWU poses at West Coast ports. Days before the July 1st expiration of the ILWU’s master contract, Tirschwell wrote in a WSJ article:

An actual strike isn’t probable. More than half a century has passed since the last dockworker strike on the West Coast. Much more likely are local labor disruptions. There was no strike at West Coast ports in 2014 and 2015, when the contract was last up for negotiation (it was extended in 2019). But there were nearly six months of labor disruption, leading to billions of dollars in losses for agricultural exporters. Local units of the ILWU disrupted individual ports over local grievances they felt weren’t being addressed in the negotiations. Port employees’ main tactic—which they’ve employed since the 1990s—was to work “to the letter of the contract,” loading and moving containers very slowly. It’s not possible to stop a dockworker from driving equipment at a snail’s pace, and it can severely disrupt cargo flow.

These labor slowdowns weren’t just costly for agricultural exporters, whose produce rotted on the docks. Importers couldn’t get their goods in time to get them on the shelves for the holiday shopping season. Shippers certainly haven’t forgotten about the costly port congestion resulting from the 2014-15 contentious contract negotiations and diverted cargo this summer to East and Gulf Coast ports in case a repeat happens.

Union Jurisdiction & Automation

Initially, the most talked about concern for making ILWU contract negotiations contentious was automation. However, union jurisdictional issues pertaining to the T5 terminal at the Port of Seattle has reportedly kept negotiations from even getting to the problem of automation, which ports need to keep up with modern shipping volumes but the union views as an existential threat.

Pointing back to the 2008, the Union says a quid pro quo was reached where the unions would allow the ports to automate if management would support the ILWU in union jurisdiction matters. Maybe so. The ILWU was also well compensated in pay and benefits. But now, court ruling on the union jurisdiction fight the ILWU has been having at T5 went against the union, and the ILWU is calling into question the ports’ right to automate at all.

Contract-Related Local ILWU Labor Action

Among other local labor action, Tirschwell reported in the JOC last week that dockworkers were refusing to work at an automated terminal:

In Los Angeles, dockworkers as of this week were continuing to refuse to work ships on the automated side of Pier 400…

He reported the union cited safety concerns as the reason for this action. Of course, when truckers picketed the Port of Oakland over AB 5 and dockworkers refused to cross the picket line, the union said that was because of safety concerns too. Dockworkers who refused to work then never mentioned safety issues when they told reporters how they were standing with the truckers.

It’s amazing how these unspecified safety concerns always seem to coincide with other issues that appear to inspire labor action.

In addition to the dockworkers refusing to work the automated side of Pier 400 in Los Angeles, Tirschwell reports:

In Tacoma, a Matson ship recently wasn’t worked due to a demand by union locals for mechanics to be trained in CPR, sources said. Sources said both issues were directly tied to the coastwide negotiations, indicating unrest is once again emerging at the local level.

With no contract in place, the ports can’t call in an arbitrator to decide if the labor action is legal.

ILWU Local 26 Strike Threat

The member-authorized strike of port security guards, associated with the ILWU but separate from the master dockworker contract negotiations we’ve been talking about, represents a serious threat to Port of Los Angeles operations. Tirschwell reports in another JOC article:

West Coast terminal employers also remained on alert for a possible strike by ILWU Local 26, a security guard local affiliated with the longshore union that voted on Sept. 1 to authorize a strike, although two sources said they thought the chance of a strike was relatively low. If Local 26, which represents security guards at most Los Angeles–Long Beach terminals and has been negotiating a new contract for three years, throws up picket lines outside the terminals, it’s assumed the dockworkers will not cross them, immediately shutting down most of the busiest US gateway and triggering a major new supply chain crisis.

ILWU Contract Negotiations Impasse

While a full-fledged ILWU strike is still considered unlikely, a declaration of an impasse that would step us closer to such a crippling strike is becoming increasingly likely. Tirschwell reports:

Sources close to the negotiations told JOC.com that although no impasse has been declared — a formal designation that could precipitate a strike, an option the union has disavowed — no solution has yet emerged after weeks of discussion centered on Seattle and the broader related issues. The highly contentious jurisdictional issue that originated in 2018 at Seattle’s Terminal 5 (T5) has become a coastwide contract issue. The longer the give-and-take over T5 drags on without progress, the greater the likelihood that an actual impasse could be declared, possibly as soon as Sept. 19, sources say.

At the time of this writing, September 19th was yesterday. No news of an official impasse has been announced, but there has also been no sign of progress either.