ILWU, PMA say they are not preparing for a longshore strike or lockout

Dive Brief:

The two parties involved in West Coast port labor talks on Tuesday issued a joint statement on Tuesday saying while talks are likely to last beyond their contract’s expiration on July 1, cargo operations would continue.
“Neither party is preparing for a strike or a lockout,” according to the update on contract negotiations from the Pacific Maritime Association and International Longshore and Warehouse Union.
As part of the update, the two parties mentioned they had met with President Joe Biden during his Friday visit to the Port of Los Angeles, California and discussed their commitment to reach a deal.

Dive Insight:

Even before contract talks started on May 10, the two parties had sought to assure observers negotiations would not result in disruptions to supply chains.

“If people just look [at] what we’ve done over the last past few years, we sat down and collectively bargained agreements to get through COVID,” Frank Ponce De Leon, ILWU Coast Committeeman said in April. “We didn’t close any of our ports up and down the whole West Coast.”

In remarks the following month, PMA CEO Jim McKenna told reporters port labor negotiations frequently extend past the negotiating deadline. He also walked through disruptions caused by previous contract negotiations, noting long talks do not always result in severe issues for supply chains. In addition, the PMA made avoiding widespread supply chain disruptions a guiding principle in its negotiating position.

“I think we’re going in with that spirit of cooperation,” McKenna said at the time. “But until you get to the table, until you see the demands that come across and the proposals that go across … you’re really at a wait and see moment in time.”

The two sides have now been at the table for over a month. And, with just over two weeks to go before the contract expires at 5 p.m. on July 1st, the union and port employer opted to issue a statement reaffirming their desire to avoid disruption even if talks extend past the deadline.

“The parties remain focused on and committed to reaching an agreement,” according to the joint statement.

Still, shippers have been preparing for the worst despite assurances from the negotiating parties. Several retailers, for example, have told investors in recent months they are taking action to mitigate risk.

"We'll obviously continue to monitor the situation in China and the potential for a work stoppage based on current contract negotiations between unionized workers and port authorities in Southern California,” Joann CEO Wade Miquelon said on a June 2 earnings call.

If West Coast ports were to shut down or slow down further due to labor actions such as a strike or lockdown, it could compound existing supply chain issues at ports like poor rail service and shifting vessel schedules.

“There is still a significant amount of uncertainty with the lockdowns in China and the ongoing labor negotiations in the LA port,” Macy’s Chairman and CEO Jeff Gennette said in May. “Factors like these drive us to continue taking a prudent and disciplined approach with our lead times and forecasting.”