West Coast Port Workers Kick-Start Negotiations

The contract for more than 14,000 full-time dockworkers doesn’t expire for nearly five months, but already shippers are nervous that chaos may reign if negotiations go awry.

In 2002, the last time the International Longshore and Warehouse Union contract was up for renewal, bitterness and antagonism reigned. There was a 10-day lockout that fall at all 29 ports up and down the West Coast, stalling the arrival of apparel and other goods right before the critical holiday season.

“It was hugely disruptive,” said Erik Autor, vice president and international trade counsel for the National Retail Federation, a Washington, D.C., trade group that represents big and small retailers. “Last time we saw this thing developing, it was like watching a crash in slow motion.”

This time, however, things might be better. The ILWU and the Pacific Maritime Association, the San Francisco organization that represents shipping lines and terminal operators at the West Coast ports, will sit down at the negotiating table some time in March to cobble together a new contract before the old one expires at midnight, June 30. In 2002, contract negotiations didn’t start until May.

Beginning Jan. 28, ILWU members will hold a two-week caucus in San Francisco to hammer out relevant issues the union wants to discuss. In addition, the NRF is meeting with both the PMA and the ILWU to get a feel about how negotiations might go. “We are anxious to avoid a situation again,” Autor said. “We want to be a positive force to move this thing along. But you know, it is difficult to predict how this thing is going to evolve.”

Neither side is publicly divulging what issues might be discussed. But the same issues that prevailed during the last contract talks are still relevant today.

The terminal operators and shipping lines want to implement more technology on the docks, while the longshore union wants job security and to maintain its health benefits and pension plan.

“It boils down to the PMA looking for potential changes to make gains in productivity in any direction they can do it, and the ILWU wants job security and to protect its benefits,” said economist and U.S. ports expert Paul Bingham with Global Insight Inc., an economic-forecasting firm based in Waltham, Mass.

Jim McKenna, PMA’s president, has already mentioned he would like to do away with the “hoot owl” shift from 3 to 8 a.m., replacing it with two 10-hour shifts that would streamline operations and increase productivity. “In discussing ways to improve productivity at the ports, Jim did suggest that one approach might be to adjust the shifts on the docks,” said Steve Getzug, a PMA spokesperson. “Jim hasn’t said anything about health care, but health care costs are rising.”

Technology was one of the major sticking points during the last contract negotiations. Specifically, the PMA wanted the marine clerks, who track cargo containers at the docks and in the port, to use more-sophisticated technology to electronically monitor containers instead of using a paper trail. At first, the ILWU balked, fearing that technology would reduce marine clerk ranks by 400. When the PMA agreed to move any redundant marine clerks to other areas, a green light was given for electronic data monitoring.

But a rising tide of cargo containers arriving from Asia to the West Coast ended up boosting employment among marine clerks. In 2006, there were 1,280 marine clerks working at the ports of Los Angeles and Long Beach. There are now 1,380, according to ILWU spokesperson Craig Merrilees.

“The big leftover issue is technology,” said Kristen Monaco, a California State University, Long Beach economics professor who specializes in transportation and labor issues. “A lot of that technology hasn’t been implemented, such as optical character readers for containers and trucks. Some of the terminals weren’t prepared to adopt the technology.”

If the PMA doesn’t push for more technology, new security measures at the ports will fill the gap. Currently, the federal government is issuing Transportation Worker Identification Credentials, a biometric card mandatory for all truckers picking up cargo containers at the ports. Eventually, the cards will be read by a sophisticated card device. In addition, trucks calling at the ports will have to be fitted with RFID tags to get through the terminal gates.

“This security issue is moving us in the way of more technology,” Monaco said.

Slower economy

Even though cargo volumes arriving on the West Coast have skyrocketed in the past few years, growing at an annual double-digit pace, a slowdown began last summer and is expected to continue through the spring.

Slower traffic could translate into weakened bargaining power for the ILWU. “We do know that workers are not working as much as they used to,” Monaco said.

In addition, the ports have more freelance port workers waiting in the wings. The increase in freelancers occurred after the 2004 port congestion problem stalled traffic on the waterfront. Consequently, thousands of casual workers were trained to step in during peak periods. There are now more than 9,000 casual workers at the ports of Los Angeles and Long Beach, while there are only 7,436 longshore workers with full-time status.

Apparel and retail companies are also developing contingency plans. Many shippers are looking at using alternative ports if another lockout or strike occurs this summer or fall. Some might send their ships from Asia through the Panama Canal, docking on the East Coast. East Coast dockworkers are not governed by the ILWU but are organized under the International Longshoremen’s Association.

Others are considering West Coast Canadian ports, where the longshore workers are under a different ILWU contract.

“The rank and file are aware of other ports, such as Prince Rupert, which just came on line in Canada,” said Global Insight’s Bingham. “The ILWU knows they are not in a monopoly situation.”

Also, optimism is resting with the new leaders heading the PMA and the ILWU.

During the 2002 contract negotiations, the PMA was headed by Joseph Miniace. Miniace had three decades of labor-relations experience. He was pushed out by the PMA in 2004.

And the ILWU was headed by Jim Spinosa, a former Los Angeles marine clerk who was known for his fiery negotiating style. He retired and was replaced by Bob McEllrath, a slightly more mellow person known as Big Bob, who came on board in September 2006. He got his start in the Vancouver, Wash., port.

“My impression is they are less antagonistic,” said the NRF’s Autor. “I think they can sit down and have a reasonable, business-like discussion without throwing bombs at each other.”