A day after federal mediators entered the contentious discussions between harbor employers and the Office Clerical Unit (OCU) of the International Longshore and Warehouse Union (ILWU), a tentative agreement was announced that ended the strike against ten terminals and fully reopened the ports of Los Angeles and Long Beach for business.
The eight-day work stoppage, which caused a backlog of vessels and diversion of an estimated twenty vessels to other ports in the United States and Mexico, must still be ratified by the unit’s eight hundred members.
A story in the Los Angeles Times posits that the mediators, called in at the request of Los Angeles Mayor Antonio Villaraigosa, pushed the unions into a quicker deal fearing a loss of influence and negotiating power once the mediators took over.
Reporting today from the Journal of Commerce’s Bill Mongelluzzo indicates a six-year deal, retroactive to June 30, 2010, the expiration date of the previous contract.
The core issues of the dispute were not about wages or benefits. Among the highest-paying union jobs in the country, longshoremen average between $120,000 – $200,000/year in salary and reportedly have very comprehensive health insurance, pensions and other benefits. The union was fighting to protect the number of jobs lost to attrition, retirement or outsourcing. Stephen Berry, the employer’s negotiating representative, confirmed there would be no outsourcing of jobs, but no details are as yet available on demands of the employers for retirement or filling of jobs under different circumstances.
Anyone who deals with ocean carriers know that they have both centralized and scattered their business functions around the globe. Bills of lading are entered in India, call centers and customer service functions are in Central America and a presence in every port and inland hub has been reduced to one or two key geographic centers for payment processing and in-country issues. As a result of this, the OCU, who handles paperwork and not cargo, were keenly aware of the risks of ceding ground.
While no details of the agreement have been made public, this settlement is reached a day after more than one hundred associations and groups wrote a letter to the White House, urging President Obama to step in and resolve the matter and get cargo moving again.
Click on the graphic to see which terminals and carriers were struck and affected.
Know that the carriers who are listed have vessels either waiting to discharge or at anchor waiting to be unloaded and reloaded for export. The next challenge comes in prioritizing vessels and cargo, repositioning rail assets and moving cargo on and off the piers in quick and orderly fashion.
As we cautioned in our previous communication, while matters on the West Coast are now resolved, things still remain to be settled on the East Coast. A fellow forwarder colleague who does business on both coasts cautioned that the personalities and issues involved are different there, but perhaps something could be gleaned and used as a framework for a new deal that covers the ports of the US East Coast and Gulf.
Please stay in contact with your contacts here at Camelot for updates on the status and availability of your cargo which may have been affected by this work stoppage.