West Coast ports could shut down in next 5 days

Sarah Aitchison, February 4, 2015, Puget Sound Business Journal

Take the contract, or the imminent shutdown is on you.

That was the message from Pacific Maritime Association President James McKenna Wednesday afternoon.

The PMA offered the International Longshore and Warehouse Union a labor contract Tuesday. McKenna called it the best offer the PMA could come up with.

In the offer, longshore workers receive an annual income of $147,000 with the option of a 3-to-5 percent increase per year and a fully paid health care plan known as a “Cadillac plan.” The Affordable Care Act mandates that the PMA pay a premium on that plan: $35,000 per year, per worker.

The contract would be valid for five years.

The offer includes all the bells and whistles, McKenna said. If the union doesn’t agree to it, he said the ports could shut down in as few as five-to-10 days. He said that the PMA doesn’t want a lockout, but may not have any other choice.

Negotiations are at a point where anything was possible, he said, and that’s why the PMA pulled out all the stops in this contract.

“The PMA must decide how much longer we will pay longshore workers to work slowly,” McKenna said. “It’s the same result as a strike, but they are still getting a paycheck.”

McKenna said he was confident that the two parties could reach an agreement.

The ILWU agreed that they were close to signing a contract.

“We’ve dropped almost all of our remaining issues to help get this settled – and the few issues that remain can be easily resolved,” said ILWU President Robert McEllrath.

The ILWU has also offered up a contract in the past, but the PMA did not agree to it.

There are about six major issues outstanding including: wages, pensions, terminal contracts, the arbitration process, how to decide disputes that happen on the docks and how exactly ports operate, McKenna said.

The PMA and ILWU are far apart on about half of them. He didn’t specify which issues they were far apart on.

The PMA and ILWU have been renegotiating an expired labor contract since May 15. The six-year contract ended on July 1.

But beginning on Oct. 31, the PMA accused the ILWU of intentionally slowing down work at the ports to influence talking power. The ILWU denies these claims and says the slowdowns are because of major changes in the industry that make their job more difficult.

Regardless, the slow negotiations have rippled throughout ports all along the West Coast, including the ports of Seattle and Tacoma. In a state where 40 percent of jobs are linked to trade, that’s a big deal. Agricultural products have sat rotting at the docks – the apple industry alone estimated losing about $19 million a week. Import and export businesses have been working at 25 percent normal capacity and are months behind their contracts. Companies have laid off staff because of the lack of work. Traders in China have raised their concern to Port of Seattle staff. Retail importers have had to fly in their products at a high mark-up price.

“Closing the ports at this point would be reckless and irresponsible,” McEllrath said.

McKenna estimated that West Coast ports were operating an average of 50 percent slower than normal. Nearly 50 ships are anchored at West Coast ports waiting to be unloaded, he said.

“In the very near future, every ship servicing trade will be literally parked on the West Coast of the United States,” he said.

At the beginning of January, both parties requested help resolving negotiation hurdles from a federal mediator after pressure from trade associations, businesses and lawmakers.

The mediator has had a positive impact on negotiations, McKenna said, but he can’t force the two sides to come to agreement on certain issues.

Since the involvement of a mediator, the two parties have determined who will repair and maintain chassis but not the details of how exactly that will happen.

Until now, both the PMA and ILWU have been tight-lipped on the details of negotiations. McKenna’s statements offered a first comprehensive look at what has been stalling negotiations, and ports, for months now.

The offer from the PMA is comprehensive, but it isn’t final.

“We put it all on the table,” McKenna said. “Would I ever say that nothing will change on that agreement? No.”

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