US West Coast port labor contract expires, raising stakes in talks

LOS ANGELES, July 1 (Reuters) – The union and employers negotiating a new contract for more than 22,000 U.S. West Coast port workers said the high-stakes talks that are being watched closely by the industry and the White House would continue after the late expiration of the agreement. Friday.

The agreement covers 29 Pacific Coast ports stretching from California to Washington State that handle nearly 40% of US imports. Any slowdown or work stoppage could upend the country’s already strained supply chains, fuel inflation and exacerbate pressure on a flagging economy that is driving down President Joe Biden’s approval ratings.

“Although there is no contract extension, freight will continue to move and normal operations will continue at the ports until an agreement can be reached,” the employers’ group said. Pacific Maritime Association (PMA) and the International Longshore and Warehouse Union (ILWU). in a joint statement.

“Both parties understand the strategic importance of ports to local, regional and US economies, and recognize the need to finalize a new coastwide contract as soon as possible,” PMA and ILWU ahead of expiration of the contract at 5 p.m. PDT Friday (0000 GMT Saturday).

When the contract expired, so did its “no-strike” clause, said Peter Tirschwell, vice president of shipping, trading and supply chain at S&P Global Market Intelligence.

Hours before the expiration, more than 150 business groups implored Biden to push for a smooth and quick resolution.

Groups representing industries ranging from agriculture and apparel to trucking and toys have called on the president to work with PMA and ILWU to extend the contract, engage in good faith negotiations and avoid any activity that would cause new disturbances.

The Labor showdown has been on Biden’s radar for months. He made the unusual decision to meet with the ILWU and the PMA in Los Angeles on June 10. His labor secretary checks in weekly with both sides, kicking off the talks in May. Read more

“We’ve never had a White House dealing with these negotiations the way they are now,” Tirschwell said.

The last negotiation of the West Coast port labor contract failed in 2015 after nine months. Dockworkers halted work for eight days, which blocked trade flows and diverted about $8 billion from Southern California’s economy alone. President Barack Obama dispatched his Secretary of Labor to strike a deal.

Automating the movement of containers in ports, which leads to fewer jobs, seems to be a key issue in the ongoing discussions. Neither side has identified the problem specifically, but the PMA and ILWU have published dueling studies on the impact of automation and media-swapped barbs.

In a June 14 statement, PMA and ILWU said they did not anticipate any work stoppages or lockouts that would worsen existing traffic jams. Read more

Yet wary shippers take no chances. They move cargo away from the West Coast to avoid potential labor slowdowns, especially at the nation’s busiest port complex in Los Angeles/Long Beach. This drives up costs and contributes to backups in the ports of New York/New Jersey, Savannah and Houston. Read more

Reporting by Lisa Baertlein in Los Angeles Editing by Marguerita Choy, Alistair Bell and Leslie Adler

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