Industry News

Offer on the Table, Possible Lockout, Public Distortion, and Congestion

Offer on the Table, Possible Lockout, Public Distortion, and Congestion:

Is there still Hope?

By now, it is pretty well known that the Pacific Maritime Association issued an offer to the International Longshoremen and Warehouse Union on February 4, 2015 in hopes to end an 8-month dispute and what seems to be never-ending negotiations.  [Click here, to view Offer Fact Sheet]

The offer includes the following:

  • To increase full time pay by 3% per year (14% total over 5 years)
  • To raise base pay rate from $35.68/hour to $40.68/hour
  • To guarantee existing pay to 40 hours per week
  • To continue to offer ILWU’s fully-paid health care program (over $35,000/year)
  • To increase ILWU pension by 11% to $88,800 per year
  • To give ILWU’s jurisdiction to maintain and repair truck chassis

LOCKOUT RUMORS

With that being said, there were also rumors that spiraled on February 5, 2015 speculating an employer lockout in 5-10 days if the ILWU did not accept the offer.

Both the PMA and ILWU state they are trying to avoid a lockout.  However, it could be that fate could land on one local issue:  There is reportedly friction between the ILWU locals and an arbitrator in Southern California and rumors that ILWU wants to fire an arbitrator, which will only cause more ruckus in the end.

PUBLIC DISTORTION

Along with the lockout rumors came public distortion as to what the PMA offer to ILWU actually entails.  “ILWU International President Robert McEllrath complains the PMA is threatening to shut down West Coast ports, bargaining in the media, and distorting the facts.” [American Shipper]

Longshoremen across Twitter post that only about 45% of the workforce are casuals who make closer to $35-40,000 per year (if even that) and have zero benefits.  They claim that only about 10% of the longshoremen workforce are making the high-end salary the public claims to be a longshoremen salary average. Just food for thought.  The ILWU continues to tells employers: “Finish negotiations, don’t close ports over only a few remaining issues.” [Longshore Shipping News]

WORK SLOWDOWNS, SPACE AVAILABILITY, AND CONGESTION

To add to lockout rumors, arbitration disputes, and salary distortion comes the actual congestion issue at port.  PMA claims the ILWU is not releasing skilled operators to work equipment.

“According to a process that has been in effect since 1999, the PMA places orders for yard crane operators, and the ILWU hall dispatches the operators. At Los Angeles-Long Beach, the ILWU normally dispatches a mix of 110 certified and qualified crane operators each day. However, the ILWU on Nov. 3 notified PMA that it would only dispatch 35 certified crane operators each day, Gates said”. [Journal of Comerce]

 

On the other hand, ILWU is claiming that employers won’t unload ships because of congestion, although “there is space.” [American Shipper]

 

ILWU empty dockThe union provided the media with photos it said disputed the employer group’s assertion that West Coast docks are too congested to unload ships and show “large tracts of space that would easily fit thousands of containers.” It did not provide exact identification of what terminals the photos show, but said many were taken in Los Angeles and Long Beach.  [American Shipper]

A video is provided by Local 13 here.

 

IS THERE HOPE?

The deadlock between PMA and ILWU almost seems at a standstill, but there is still hope …. And without a lockout or strike.  That’s what Scarbrough would like to think anyway.  We hope that soon an agreement will be made, solutions for congestion will be advised, and we can get our nation’s cargo back under control. In fact, an insider longshoreman source told us that he “thought a conclusion would come soon, maybe “by week’s end”…. “a lockout is unlikely to occur.”

 

Even if an agreement is made, “it will take months to end the widespread pain, freight disruptions, and losses caused by the massive cargo traffic jam.” [Wall Street Journal]

 

WHAT IF LOCKOUT DOES OCCUR?

Some employers and some cargo interests believe that when a stalemate of this type exists, especially when negotiations have dragged on for almost nine months, the only option left for employers is to lock out the union and, when commerce is completely halted, wait for the president to go to court and seek an injunction for an 80-day cooling-off period under the Taft-Hartley Act.

President Bush did just that in the 2002 negotiations when the ILWU engaged in work slowdowns and the PMA responded with a lockout of the union. Bush sought the injunction after West Coast ports had been shut down for 10 days.

A Taft-Hartley injunction can be risky and very costly for employers, and for cargo interests, Belzer says in an article by Journal of Commerce. Federal mediators could attempt to pressure the union to stop the work slowdowns, but there is no guarantee that this would be effective. That would mean that the work slowdowns and port congestion could continue for 80 days and the terminals would be no better off after the cooling-off period than they are today. [Journal of Commerce]