Saturday, February 7, 2015

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Tension escalates in West Coast contract talks as PMA temporarily suspends weekend shifts

Labor contract talks for West Coast ports seem to be going south, as employers and dockworkers continue to slug it out over who is to blame for cargo congestion and retailers demand that PMA and ILWU negotiators get their act together.

On the heels of an ILWU statement Friday urging negotiations to continue and claiming that a deal was "extremely close," the PMA temporarily suspended vessel loading and unloading operations over the weekend. Vessel operations are scheduled to resume Monday, February 9.

"Temporarily suspending port operations is just another example of the International Longshore and Warehouse Union and Pacific Maritime Association shooting themselves in the collective bargaining foot," said Jonathan Gold, vice president for supply chain at the National Retail Federation. "The continuing slowdowns and increasing congestion at West Coast ports are bringing the fears of a port shutdown closer to a reality."

Mixed messages

The PMA said yard, rail and gate operations would continue at terminal operators’ discretion, asserting that the ILWU continues to limit operations by withholding the needed crane operators or operating slowly.

"In light of ongoing union slowdowns up and down the coast which have brought the ports almost to a standstill," reads the statement, "PMA member companies finally have concluded that they will no longer continue to pay workers premium pay for diminished productivity."

"After three months of union slowdowns, it makes no sense to pay extra for less work," said PMA spokesman Wade Gates, "especially if there is no end in sight to the union’s actions which needlessly brought West Coast ports to the brink of gridlock."

Just prior to the PMA announcement, the ILWU had issued a statement stating it wanted to keep management at the negotiating table in order to finish an agreement that is "extremely close."

"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 promised to keep cargo flowing, despite what it termed as the "massive, employer-caused congestion crisis" that delayed shipping for most of 2014.

These are the latest sallies the skirmish between the ILWU and the Pacific Maritime Association, which have been in talks for seven months to concur on a new contract for up to 20,000 longshore workers at 29 West Coast ports. Both sides have blamed each other for the crippling cargo congestion that has plagued the coast for the past three months.

Enough is enough

Management says the majority of the cargo congestion is due to dockworkers deliberately slowing down work pace at West Coast ports. The

union says it is not orchestrating a slowdown, and that the root causes of the backups include a shortage of truck chassis and the advent of mega container ships.

The industry take seems to be that all three – labor slowdowns, chassis shortages and the new logistics of processing mega container ships – are creating a perfect storm of problems that are overwhelming West Coast ports and devastating the supply chain as they stem the flow of trade.

"Enough is enough,v said Gold, in the NRF statement. "The escalating rhetoric, the threats, the dueling press releases and the inability to find common ground between the two sides are simply driving up the cost of products, jeopardizing American jobs and threatening the long term viability of businesses large and small."

Best offer

Last week, the PMA announced its "best offer" to the ILWU, saying that employers would shut down the ports within 5 to 10 days if a deal isn’t reached.

In a Wednesday teleconference, Jim McKenna, PMA president and chief executive officer, outlined the terms of a five-year contract, which included 3 percent annual wage increases. He said the employers’ offer meets the International Longshore and Warehouse Union’s two biggest demands: maintenance of their high-end health benefits and jurisdiction over maintenance and repair of truck chassis.

McKenna also said the union has recently made new demands, insisting on changes to the local arbitration system that would give them the ability to unilaterally remove arbitrators who rule against them.

"We're not considering a lockout," McKenna said on the conference call. "What I'm really saying is that this system will bring it to a stop. Once that happens, we really don't have a choice."

The ILWU said this is the second time in recent memory that the employers have threatened to close ports at the final stages of negotiations. They said the union has not engaged in a port strike over the West Coast longshore contract since 1971.

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

"Our message to the ILWU and PMA: Stop holding the supply chain community hostage," said NRF’s Gold. "Get back to the negotiating table, work with the federal mediator and agree on a new labor contract."


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