Union actions at LA and Long Beach branded illegal

The standoff between the unions and the employees on the US west coast is sparking some choice words, and keeping supply chain leaders on their toes.

The two parties have yet to come to any pay agreement despite the fact that the last contract between the International Longshore and Warehouse Union (ILWU) and the Pacific Maritime Association (PMA) ran out on July 1.

Towards the end of last week, many workers at the ports of Los Angeles and Long Beach failed to turn up to work leading to terminals being shut down for a day and a half.

The PMA, which represents the employers of dockworkers on the US west coast, issued a release in which it hit out at the union’s “disruptive” actions, something it labelled as illegal.

“While the union is using new tactics, the result is the same: the disruption of terminal operations,” the PMA stated, with shippers looking on with concern at the possible ripple effects of industrial action at America’s twin main maritime gateways.

The PMA said the union had unilaterally delayed the standard dispatch process, which is jointly administered by PMA and the ILWU, and refused to allow PMA’s participation in the labour dispatch process, actions which have slowed the start of operations throughout the Southern California port complex. In addition, the PMA said the union has forced crucial cargo handling equipment to be taken out of operation at several key terminals.

The PMA warned that further industrial action could hurt jobs long-term.

“As has been pointed out for years, any actions that undermine confidence in West Coast ports threaten to further accelerate the diversion of discretionary cargo to Atlantic and Gulf Coast ports,” the PMA stated.

Lars Jensen, who heads up container consultancy Vespucci Maritime, said the port disruption was like “a train wreck in slow motion”.

“Ever since the old contract failed to get renewed in the middle of 2022, the spectre of labour disruptions on the US west coast has been a constant risk factor. A risk which has kept some US importers from shiftings parts of their supply chain back from the east coast to the west coast even though the pandemic-induced issues had been largely resolved,” Jensen wrote in a post on LinkedIn.

Andy Lane, a partner at container advisory CTI Consultancy, told Splash: “Port workers provide an essential service, but they are also just one cog in the overall supply chain machinery. Generally speaking they are well-paid, but they often push ridiculous demands using the threat of creating havoc as the primary weapon.”

This might have yielded short-terms gains in the past, Lane said, predicting the model will ultimately result in longer-term pain, as cargo finds alternative paths which are more stable and of lower cost.

“Just as the UK automotive workers killed their industry in the 1980s, history might well repeat,” Lane said.

Throughput at Los Angeles and Long Beach was sharply down in Q1 year-on-year with top officials saying this week they have been in dialogue with the Biden administration to try and force a resolution to the disruptive stalled labour negotiations.