By ROBERT JABLON, Associated Press
LOS ANGELES (AP) – A contract between shipping companies and 22,000 dockers on the west coast expired at the weekend. But both sides continued to speak, saying they wanted to avoid a strike that could devastate an economy already stressed by rising inflation and supply chain woes.
The contract, which expired last Friday, included workers at ports from California to Washington state, who handle nearly 40% of US imports.
“While there will be no contract extension, cargo will continue to move and normal operations in ports will continue until an agreement can be reached,” said a joint statement from the Pacific Maritime Association and the International Longshore and Warehouse Union.
The ILWU is the union representing Pacific dockers and the Pacific Maritime Association is a trade group for freight carriers and terminal operators. Its members include global shipping giants such as Maersk and Evergreen Marine.
The talks are so critical that President Joe Biden stepped in last month and met with both sides in Los Angeles. They are taking place against a backdrop of rising imports left behind by ships anchored offshore and falling exports.
Both sides said last month they were not planning any downtime, but US industry is clearly concerned.
In a letter to Biden issued hours before the last contract expired, about 150 trade groups, from truck drivers to the agricultural, chemical and toy industries, urged the administration to work with both parties to extend the current contract, negotiate in good faith and agree to avoid actions that further disrupt the ports.
The letter stressed that the groups are entering their peak season for imports as retailers stockpile goods for the fall break and back-to-school items.
“We continue to expect cargo flows to remain at all-time highs, which will further strain the supply chain and increase inflation,” the letter said. “Many expect these challenges to continue for the remainder of the year.”
A major topic in the talks is the automation of port facilities. The union argues that this will cost the jobs of crane operators and other workers, who can make $100,000 or more a year. The Pacific Maritime Association argues that automation will actually increase employment by allowing ports to move more cargo.
Ports are already struggling to handle container traffic, much of it from Asia where ports are highly automated.
After the COVID-19 pandemic hit in 2020, cargo traffic to the ports collapsed drastically. But then it recovered and has been booming ever since. Rising demand has caused congestion in the twin ports of Los Angeles and Long Beach, which moved around 20 million freight containers in 2021 alone. The ports alone, collectively known as the San Pedro Bay Port Complex, handle more than 30% of US waterborne container imports and exports
About 100 ships were waiting to enter the port complex in January, but that total is now down to 60 or at times as low as 20, Port of Long Beach executive director Mario Cordero said Tuesday.
Cargo is loaded and unloaded an average of 16 hours a day, Cordero said. However, ports must have a “24-7 mentality” to handle Asian traffic, where ports operate 24 hours a day, he said.
Contracts are renegotiated every six years, and Cordero said most have been completed without disruption.
However, a lockout in 2002 and an eight-day strike in 2015 cost the US economy billions of dollars and forced the administrations of then-Presidents George W. Bush and Barack Obama to intervene.
Cordero said he saw no work delays at the port and was optimistic the ongoing negotiations would end with a fairly quick resolution.
“The world is looking to us to make sure we move the cargo,” he said. “I think the administration has made it clear that they expect a reasonable…result.”
Unionized dockers are also seeking a raise, arguing that the shipping companies can afford it. Overseas cargo shipping companies are making record profits amid global demand.
Last month, Biden signed the Ocean Shipping Reform Act – designed to make shipping goods across oceans cheaper – blasting the concentration of corporate shipping in the hands of nine foreign-owned companies.
“These airlines made $190 billion in profit in 2021, seven times the year before,” Biden said. “The cost, as you can imagine, was passed directly to consumers and left to American families and businesses because they could.”
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