A quiet, behind the scenes negotiation has been taking place for many months between the International Longshore and Warehouse Union (ILWU) and the Pacific Maritime Association (PMA). While the negotiations have not resulted in a strike or a lock-out, the lack of a labor contract at the Ports of Los Angeles and Long Beach has become a barrier to solving the current delays in the unloading and transport of goods arriving at the two ports.
Last week, the Chamber joined 105 trade organizations across America in a letter urging ILWU and PMA to quickly reach a new labor agreement because “Congestion problems at key West Coast Ports are getting worse each day, and the absence of a new signed contract between the ILWU and PMA is a significant factor.”
Fall is the busiest time of the year for the ports as stores stock up for the Holidays. Cargo through the two ports increased by 10 percent in September and is up 5 percent for the year. A shortage of chassis for cargo containers and drayage drivers are two factors in the delays. Another is the extra time it takes to unload the new jumbo carriers being used by shippers.
Gene Seroka, the executive director of the Port of L.A. has been vocal in calling for both parties to move quickly toward an ILWU/PMA contract. “Once a contract is in place, other segments of the maritime logistics supply chain can finalize plans and agreements with labor. We need our labor partners at the table to solve these important issues,” said Seroka.
The lack of an ILWU/PMA contract poses both a short term crisis and a long-term competitive disadvantage if shippers and retailers decide to move more of their cargo to ports on the gulf or East Coast in the future. That was the result after the failed contract negotiations in 2002.
As Seroka notes, the current congestion problems plaguing the ports of L.A. and Long Beach cannot be solved without everyone being at the table. Right now, ILWU and PMA are at another table discussing other issues. On the outside are thousands of other workers in Southern California who will be at a long-term competitive disadvantage if the contract negotiations are not resolved quickly. That would impact Christmas in Southern California for many years to come.
And that’s The Business Perspective.
The Business Perspective is a weekly column by Gary Toebben, President & CEO of the Los Angeles Area Chamber of Commerce, produced with the input of Public Policy staff.