U.S. West Coast waterfront employers on Wednesday overwhelmingly voted to ratify a five-year contract with the International Longshore and Warehouse Union, bringing both sides one step closer to healing the wounds inflicted on shippers during months of congestion.
The ILWU is expected to announce on Friday whether its rank-and-file members, which voted on the proposed pact over the past few weeks, approved the agreement. ILWU leadership in early April gave a landslide endorsement of the tentative agreement, a process viewed by some as reducing the chances of rank-and-file members rejecting the contract.
In a nod to growing competition from non-West Coast ports, the PMA said in its announcement that the contract’s stronger arbitration system was needed “to support waterfront stability, capacity growth and productivity.” The PMA said health care changes kept in the contract will continue to enhance efficiency, keep down costs and reduce fraud. In addition to keeping “a very generous, employer-paid health care plan,” the contract also would deliver increases in wages and pension benefits to ILWU members.
In a statement, PMA President and CEO Jim McKenna said the pain shippers felt during the drawn-out negotiations was "regrettable.” Such an acknowledgement of the damage done to shippers’ supply chains wasn’t made when the ILWU and PMA announced a tentative agreement Feb. 20.
“We look forward to building upon the incredible advantages West Coast ports offer and winning back the trust and confidence of the shipping community. This contract provides important tools to accomplish that,” McKenna said.
The proposed contract, which covers 20,000 dockworkers at 29 ports, is far from radical. It avoids issues of automation that were largely addressed in the previous contract, continues employer-paid medical benefits, including the Cadillac tax in the Affordable Health Care Act that will take effect in 2018, and preserves ILWU jurisdiction over chassis inspections, maintenance and repair, even though the owners of the equipment are mostly non-PMA members, an issue that could raise legal issues down the road.