West Coast Dockworkers Are Preparing to Negotiate a New Contract

The shipping industry is making record money as supply chain snarls and consumer demand drive up opportunities for profit. It’s the perfect moment for the 15,000 dockworkers who keep the goods flowing to negotiate their new contract.

There’s no better time for ILWU members to address problems they’ve spent years waiting to negotiate. (Brittany Murray / MediaNews Group / Long Beach Press-Telegram via Getty Images)

In a letter sent to the International Longshore and Warehouse Union (ILWU) on November 16, the Pacific Maritime Association (PMA), which comprises some seventy ocean carriers and terminals at twenty-night West Coast ports, proposed extending its contract with the union for an additional year. The current contract expires on July 1, 2022, and is itself the result of a prior three-year extension. Originally, it would’ve expired in 2019, but the majority of ballots cast by ILWU members favored the extension in exchange for a wage and pension increase.

That won’t be happening this time: ILWU president Willie Adams issued a same-day response, addressed to PMA president James McKenna, declining the extension.

“It is especially ironic to ask labor to pass on collective bargaining,” wrote Adams, “when there is an historic labor shortage outside of the ports caused precisely because these other workers (for example, truck drivers and workers at distribution centers) do not have the types of wages and working conditions attained through collective bargaining that persuade people to stay and commit their lives to tough physical labor.”

The reason the PMA wants an extension is clear: the shipping industry is making record money as supply chain snarls and consumer demand are driving up opportunities for profit, even as that means higher prices and shortages for the public. The ILWU’s response to the PMA included three pages of headlines attesting to these profits.

As recently detailed in the Los Angeles Times, major ocean-shipping companies are making more money than ever, leaving little financial incentive for them to resolve any crises. Nine shipping companies organized into three alliances — 2M, THE Alliance, and the Ocean Alliance — control 80 percent of global container shipping, making it easy to coordinate to boost freight fees, and thus profits. A.P. Moller – Maersk, the Danish shipping behemoth, is set to make as much this year as it did in the previous nine years combined, an amount that would be the most profit ever recorded in Danish history. COSCO Shipping, the Chinese shipping giant, has doubled its revenue since last year.

The PMA does not want anything to disrupt this bonanza, which is why they suggested dockworkers defer bargaining. As McKenna wrote in his letter proposing the extension, “There is already a perception among the trade community that negotiations are likely to result in some kind of disruption.”

Unfortunately for the shippers, disruption is what dockworkers are particularly well-positioned to do, if need be. During contract negotiations in 2014, West Coast ports faced slowdowns as the ILWU’s fifteen thousand waterfront members expressed displeasure with employer foot-dragging, and the Obama administration ultimately got involved. ILWU members work critical choke points in not only the US economy but global capitalism, and their labor has been conscripted into a national mobilization of sorts as the pandemic leads public attention to zero in on the supply chain.

Dockworkers know the importance of their labor and have a rank-and-file-driven union. Despite capital’s decades-long anti-labor onslaught and the union’s internal divisions, the ILWU remains one of the country’s most militant unions, willing to wage political strikes. Workers know that with a more favorable presidential administration than the previous one, and consumer demand that would make a lockout by employers harder to pull off, now is the time to negotiate. As the ILWU’s Adams told Bloomberg News, “We’ve been waiting for seven years to address issues that are important to dockworkers.”

The union is now undertaking the process of determining what issues members want to prioritize in the coming negotiations, which will begin next year. While those specifics have yet to be determined, safety and automation are likely to be two major subjects of bargaining.

Twenty ILWU members have died of COVID-19, and as for automation, it has long been a key area of bargaining. While most US ports are publicly owned, terminals are privately leased to terminal operators from around the world. These operators seek to automate the process in hopes of reducing labor costs and boosting productivity, while longshoremen demand a say in how and to what end technologies are introduced — after all, automation can mean more, rather than less, hazardous working conditions, as we can see at other points in the supply chain, such as Amazon warehouses.

In a recent press conference, President Joe Biden called on West Coast ports — specifically Long Beach and Los Angeles, through which some 40 percent of US goods move — to operate 24/7. Such an injunction is not directed to longshoremen, who are already available for night and weekend shifts, but to the operators themselves, who are reluctant to hire for such hours.

Such resistance to round-the-clock operations is multifaceted (and the problem of there not necessarily being truckers to collect cargo, or warehouses open to receive it during those hours, is a separate issue). For one, workers are paid more for nights and weekends, and these companies don’t want to lay out the cash for those differentials. But there is also the matter of companies’ profiting off of cargo sitting in wait. Whereas turnaround time — how quickly a ship can be loaded, travel to its destination, and unloaded — is generally the source of shippers’ profits (and why dock work was such a dangerous job before unionization, with a constant push for speedup), ocean carriers are now also making money from the backup.

Demurrage, or the rental fees they charge customers for using their box as it sits on the terminal, are lucrative, as are detention fees charged to truckers who fail to return containers quickly enough. Here’s how the Los Angeles Times explains the resulting disincentive to untangle the mess:

At the ports of L.A. and Long Beach, so many empty containers have piled up that the shipping companies often won’t allow truckers to return their empty containers but continue to charge detention fees. Truckers are then stuck with a rising detention tab and an empty container on their trailer, which means they can’t go pick up a new import container and get paid for a new job. So the pile of import containers grows, and the only players with the power to remove the empty shipping containers to free up space — the shipping companies — have little incentive to do so expediently.

All of the above has even spurred the Biden administration to sign an executive order encouraging the Federal Maritime Commission to investigate the “exorbitant fees” charged by shipping companies. The language on this is always about “foreign companies,” but Biden’s right about the fees. There’s no better time for ILWU members to address problems they’ve spent years waiting to negotiate. The industry needs to be reworked from the bottom up, and no one sees its dysfunction like the people moving the goods.