Union dockworkers at West Coast ports have reached a tentative six-year contract agreement with their employers, potentially easing concerns about shipping delays and higher prices for customers and businesses after tensions between the two sides disrupted shipyard operations throughout this year.
In a brief statement late Wednesday, the International Longshore and Warehouse Union and the Pacific Maritime Association, which represents the port terminals where longshoremen load and unload massive amounts of cargo from ships crossing the Pacific, said they would not disclose the terms of the agreement for now. However, the Wall Street Journal reported that the tentative deal calls for a 32% raise for the longshoremen through 2028 and a one-time “hero bonus” for their work during the pandemic.
Both parties still need to ratify the agreement, which awaits a vote from the union’s rank-and-file members. The union said the ratification process would take “a few months,” and said it wouldn’t share details of the tentative agreement until it finishes that process.
In a statement, acting U.S. Secretary of Labor Julie Su, who helped the two sides come together, said that “the tentative agreement delivers important stability for workers, for employers and for our country’s supply chain.”
“We are pleased to have reached an agreement that recognizes the heroic efforts and personal sacrifices of the ILWU workforce in keeping our ports operating,” PMA President James McKenna and ILWU President Willie Adams said in their statement. “We are also pleased to turn our full attention back to the operation of the West Coast Ports.”
President Joe Biden also addressed the deal on Thursday while speaking at a White House event focused on so-called junk fees.
“I want to thank everyone involved in reaching a tentative agreement at our ports on the West Coast,” Biden said. “This deal shows collective bargaining works. When employers and workers come together to agree on a deal that works for both of them, it’s good for the economy and keeping our supply chain open.”
The tentative deal, which covers 22,000 workers at 29 ports on the West Coast, comes after more than a year of negotiations on a new contract for the dockworkers. The previous contract expired on July 1, 2022. Talks began in May 2022.
Throughout the spring, the PMA accused the union of keeping workers off the job, slowing or halting work at port terminals like those in Los Angeles and Long Beach — both massive entryways for clothing, furniture, auto parts and other goods coming in from Asia — and delaying ships’ departures as contract talks went on.
Dockworkers argued that they had worked through the pandemic, at significant risk to their health, while profits soared for terminal operators and as much of the nation stayed home and shopped online, and they said they deserved a contract that reflected and rewarded those efforts. West Coast ports have also faced growing calls for automation, potentially putting many longshoremen out of jobs, as well as increasing competition from ports along the East Coast.
The deal between the longshore union and the terminal operators comes amid a number of high-profile strikes or threatened strikes over the past year — from railroad workers to writers in Hollywood. But when the Biden administration intervened to work out a deal between the rail workers and their employers, some reports indicated that many workers weren’t on board at first. Railroad operators have since worked to arrive at deals with their employees.
Along the West Coast, the ports of Los Angeles and Long Beach became the most visible representation of the supply-chain bottlenecks that stretched through 2021 and 2022, as massive container ships lined up on the water. Pandemic-related factory shutdowns abroad, overloaded U.S. warehouses further inland and snags in the movement of shipping containers all pushed delivery costs higher and slowed shipping times.
Ahead of Wednesday’s announcement, retail industry groups, worried about a replay of 2021’s supply-chain meltdown, called on the Biden administration to facilitate an agreement between the ILWU and the PMA. On Thursday, the National Retail Federation and the Retail Industry Leaders Association, two such groups, praised the agreement and urged both sides to act quickly to lock it down.
“The West Coast ports are key links in the retail supply chain,” the Retail Industry Leaders Association said in a statement. “With a tentative agreement in place, retailers can keep their supply chains moving with more certainty, consumers can rest assured their items will arrive on time, and the U.S. economy has a reduced risk of more looming inflationary pressure.”
“It is essential to begin the negotiation process early for the next labor contract and avoid a future lapse in continuity,” Matthew Shay, chief executive of the National Retail Federation, said in a statement.
The ILWU, in a separate statement released Thursday afternoon, said that the ratification process begins with a “contract caucus” that brings together delegates from local union divisions along the West Coast. After reviewing the agreement, those delegates make a recommendation to the rank and file before, who would then vote on it, the union said.
Victor Reklaitis contributed.
This story originally appeared on Marketwatch
