Contract negotiations between the International Longshore and Warehouse Union (ILWU) and the Pacific Maritime Association (PMA) continue into the final hours. Though the prospect of reaching an agreement by today’s 5p.m. expiration date seems very remote. However, given the lack of tension or disruptions leading up to today, the expiration date does not appear to be of major importance. When asked yesterday, ILWU spokesman Craig Merrilees stated, “The parties have been negotiating and will continue to negotiate.” He also said, “They will try to reach an agreement by the expiration date, but will continue beyond that time if necessary. Previous agreements have required negotiating beyond the contract expiration date.”
Even with assurances, the prospect of yet another disruption of West Coast port activity has shippers looking for alternatives, including routing some cargoes through East, Gulf or Canadian ports. No matter the precautions, huge numbers of containers would be affected in the event of a strike or lockout.
Safety, wages, jurisdiction and health care appear to be the main issues under discussion. And while safety and wages are generally resolved quickly, jurisdiction has become of focus in these talks as technology and automation are changing the workplace environment. The ILWU and PMA are also struggling to agree upon who will pay the Cadillac tax under the Affordable Care Act that will take effect in 2018, projected to be 150 million a year. If no agreement is made in this round of talks, they have the option of negotiating a three-year contract and leaving it to the negotiations in 2017 to be resolved.
On the white paper provided below, Customs has outlined and released some of the following procedures for filers: when cargo is discharged in a foreign port, transshipped at a foreign port for delivery at the original destination port (e.g., via barge), diverted elsewhere on the U.S. West Coast, diverted to an East or Gulf Coast port, or held in a ship at anchor until it can be discharged at the original destination port. Stay tuned for details from Customs and on the PMA-ILWU negotiations as they are released.
Click here for a link to the CBP whitepaper with detailed information on the interim procedures.
Click here to read our past update on the PMA-ILWU negotiations.
Click here for a JOC article detailing the economic costs of these potential disruptions.
Click here for a JOC guide to the PMA-ILWU labor negotiations.