West Coast Port Lockout Threatened, Though Union Says Deal Is Close

The top negotiator for West Coast terminal operators and ocean carriers said the region’s docks are nearing “complete gridlock” and raised the prospect of a lockout in as few as five days unless a contract deal is reached.

Pacific Maritime Association President Jim McKenna told reporters productivity has declined 50% because of International Longshore & Warehouse Union slowdowns. As congestion builds, and several dozen ships can’t reach the docks to unload, the union is forcing management’s hand, he said.

The union’s response struck a different tone, saying a deal was “extremely close” after nearly nine months of talks.

PMA presented a new, “best offer” proposal Feb. 4, McKenna said, describing it as “a true goodwill gesture to get the West Coast ports going again.”

The five-year proposal includes 3% higher wages, 11% higher pension benefits and no givebacks. Wages now approach $150,000 annually, and pensions average $80,000 a year, he said.

“We’ve dropped almost all of our remaining issues to help get this settled — and the few issues that remain can be easily resolved,” ILWU President Robert McEllrath said in the statement. “Closing the ports at this point would be reckless and irresponsible.”

The union represents nearly 20,000 workers at 29 West Coast ports.

McKenna stressed that management preferred a settlement and didn’t want to lock out workers. His news conference was the first since talks began nearly nine months ago.

“We are at a critical time right now,” McKenna said during a conference call that lasted nearly an hour. “It can’t keep going on forever. We are trying to give enough notice and lead time for businesses to make the best decisions they can.”

The parties’ six-year contract expired July 1. The recently expired deal was reached without a lockout or strike. In 2002, President George W. Bush had to intervene to stop a 10-day lockout.

“A shutdown is a nuclear option that no one wants to take,” McKenna said. “We will keep talking. The last thing we want is to close this thing down. We are not doing anything rash.”

McEllrath noted that management previously has threatened to shut the ports during the final stage of talks in a reference to 2002. ILWU’s last strike affecting all West Coast ports was in 1971, the union said.

The union’s statement again blamed management for dock problems, which were made worse by the absence of chassis for truckers to move cargo off the docks.

McKenna blamed the union for the slowdowns, saying they weren’t allowing enough workers to report for jobs.

“A lot is at stake here,” McKenna said, noting that trade through West Coast ports accounts for 12% of the U.S. gross domestic product. “It is important for both parties involved and for the nation.”

Customers and industry trade groups ranging from U.S. beef farmers to toy importers have bombarded the parties for months with pleas to resolve their differences so that cargo flows normally again.

A federal mediator has participated in the talks for about one month.

Since May, the parties have acknowledged agreement on two issues – health-care costs and chassis-handling practices. Health-care costs matter because union members could face higher taxes in 2018 under the Affordable Care act.

Chassis are an issue because leasing companies and others have acquired chassis that ocean carriers used to provide. That move injected a new element into chassis supply, since the owners of the equipment now aren’t directly involved in contract talks.