Modernization of cargo-handling operations and maintaining labor peace are foremost on the minds of West Coast waterfront employers as they look ahead to the expiration of the International Longshore and Warehouse Union contract on July 1, 2014.
“It is essential that we work smartly, and well, to prepare ourselves for the changes coming in the years ahead,” James McKenna, president and CEO of the Pacific Maritime Association, stated in the just-released PMA annual report for 2012.
The annual report took a “lessons should be learned” approach to labor events of the past year. On the East and Gulf coasts, the International Longshoremen’s Association and the United States Maritime Alliance blew a Sept. 30, 2012, contract expiration deadline and required federal mediation before agreeing to a new contract earlier this month.
The PMA noted that the issues at stake in the eastern half of the country — technology, modernization and jurisdiction — were largely resolved by waterfront employers and the ILWU on the West Coast in their contract negotiations of 2002 and 2008.
“These agreements have been followed by positive results, both in terms of volume and staffing,” the PMA stated. The report noted that implementation of technology and automation have resulted in increased cargo-handling productivity, yet longshoremen also benefited in terms of higher wages and increased work opportunities.
General longshoremen working a 40-hour week in 2012 earned on average $132,946. That’s up from $125,461 in 2007, the peak year in terms of cargo volume at West Coast ports. Total payroll for longshoremen, marine clerks and foremen reached $1.5 billion last year, which was 50 percent higher than in 2002, when the landmark contract allowing for a free flow of information at West Coast ports was negotiated.
Although technology and automation are altering some dockworker jobs, modernization has not resulted in a loss of work opportunities as some had feared. In fact, the number of Class A registrants, the highest category of union dockworkers, passed 10,000 last year for the first time. The registered ILWU work force has actually increased 34 percent since the 2002 contract was signed.
The PMA did not look smugly at the labor unrest on the East and Gulf coasts this past year. Employers in Los Angeles-Long Beach suffered through a seven-day strike by the 600-member Office Clerical Unit of ILWU Local 63 whose effect was magnified when ILWU dockworkers refused to cross the OCU picket lines.
Facing intense competition today from East Coast ports as carriers deploy large vessels in all-water services from Asia via the Suez Canal route, and beginning in 2015 when carriers will deploy mega-ships on all-water services via the enlarged Panama Canal, West Coast ports must be seen as reliable and efficient. That is why the OCU conflict late last year “was so unwelcome,” the PMA stated.
In terms of cargo volume, 2012 was only slightly better than 2011. The volume of loaded containers increased 1.3 percent. However, the 15.4 million 20-foot container units were the second highest ever. An increase of 5 percent in 2013 would put West Coast ports above the 2007 peak volume of 16 million TEUs.
As West Coast ports approach pre-recession cargo volumes, it is critical that marine terminals modernize their cargo-handling activities, and that they do so in an environment of labor peace, the PMA stated.
“On the West Coast, our focus must be on enhancing the ports’ long-term competitiveness. That’s the best way to protect jobs and economic growth in the regions where we do business,” the report stated.