Automation revs up ILWU tensions ahead of contract talks

Automation revs up ILWU tensions ahead of contract talks

Cargo delays have occurred on the West Coast during nearly every contract negotiation going back to the 1990s. Photo credit: Shutterstock.com.

Whether it’s a head-on collision, a sideswipe, or a near-miss, a dangerous encounter between US West Coast dockworkers and management is approaching with the expiration of the current collective bargaining agreement just over a year away.

That point was made clear last week by the swift and negative reaction of Southern California dockworkers to plans by TTI, which is 80 percent owned by Mediterranean Shipping Co., to automate the largest terminal at the Port of Long Beach. A statement issued by three Southern California locals of the International Longshore and Warehouse Union criticizing the plans made no mention of a key fact widely anticipated to be the main point of contention and most likely destabilizing factor in the upcoming negotiation: Under a succession of collective bargaining agreements signed since 2008, employers like TTI have the contractual right to automate cargo handling at their facilities.

The combustible element is that despite contract language allowing automation, and the fact three terminals have implemented automation since 2008, the ILWU has increasingly come to see automation as an existential threat and a microcosm of the larger threat of robotics displacing human labor. That is a marked shift from earlier years when they accepted terminals’ right to automate in return for various concessions, including lifetime income for any dockworker whose job is eliminated by automation.

That was demonstrated in a series of actions over the past two years beginning in 2019 when the union sought to prevent APMT from automating a portion of its Pier 400 terminal Los Angeles by petitioning the port board to deny a necessary permit. The effort was unsuccessful, but delayed the project by several months. It supported legislation, ultimately approved in Washington State, prohibiting zero-emission equipment purchased using government funds to be used for automation. It also supported a 2019 bill in California that as originally introduced would have empowered a state agency to approve the use of automated technology on a case-by-case basis. 

Intra-union politics also played a role. In the midst of the 2019 protests over the Pier 400 permit, the International Longshoremen’s Association drew a distinction with its West Coast counterparts, issuing a press release about the dispute and calling attention to how fully automated terminals at East and Gulf coast ports were prohibited within the six-year master contract extension signed in 2018. “We were totally opposed to fully automated terminals and got the guarantees from our employers that they would not construct them during the life of our new package,” ILA President Harold Daggett pointed out in the statement.

Many close to West Coast labor relations believe that within the next round of negotiations ahead of the July 1, 2022 expiration of the current contract, the union may go further, possibly seeking to roll back employers’ automation rights. To that end they could apply pressure on carriers to concede or negotiate by instigating slowdowns or other costly disruption to cargo movements. Cargo delays have occurred on the West Coast during nearly every negotiation going back to the 1990s, including a 10-day shutdown of the ports in 2002 and a six-month bout of disruption in 2014 and 2015 that resulted in dozens of container ships forced to anchor off the ports of Los Angeles and Long Beach. In many cases due to the high cost of disruption to their networks, carriers have given in to union demands, resulting in ILWU members receiving among the highest wages and benefits among U.S. unionized workers.

ILWU election upcoming

With the current contract not set to expire until mid-2022, however, a number of factors could still come into play. For example, this fall the ILWU will hold a leadership election, and the union’s position headed into the negotiations will only be determined once new leadership is in place.

Another unpredictable element is recent changes at ocean carriers, who comprise eight of 11 seats on the board of the Pacific Maritime Association, which negotiates with the ILWU. Not only have carriers consolidated in recent years, they experienced the power of concerted action when they withdrew capacity en masse following the lockdown in March of 2020. Having seen their profits soar during the pandemic, however, the carriers may face a union more emboldened to seek concessions. That same factor on the other hand could prompt the carriers to more quickly seek a peaceful, even if costly, settlement if freight rates and vessel charter rates remain at lofty levels next year, given that any delays to ships or cargo would be especially costly.

Less clear is how other factors will come into play, such as how employers would respond to a union attempt to roll back automation given that the increases in wages and benefits tied to employers’ ability to automate will amount to $800 million by the time the current contract expires next year. “They were paid for the right of terminals to automate,” said a senior industry executive tied to port development.

TTI’s planned investment has not been disclosed, but will likely be several hundred million or more. It will ironically make the LA-Long Beach complex more competitive after years in which it has bled market share to ports like Prince Rupert, Savannah, and others on the East and Gulf coasts. The $1.5 billion automated Long Beach Container Terminal and TraPac, the other automated terminal in the harbor, consistently produce among the shortest truck turn times in the harbor, which directly benefits shippers making choices on which port gateways to use. On an even a more basic level, with the LA-Long Beach gateway nearing capacity and additional land unavailable, the only way to grow is to densify their operations, which can be achieved only through -- you guessed it -- automation.

Contact Peter Tirschwell at peter.tirschwell@ihsmarkit.com and follow him on Twitter: @petertirschwell.