February 23, 2015 | Industry Insights
PMA and ILWU Tentatively Agree on Contract
The Pacific Maritime Association (PMA) and the International Longshore and Warehouse Union (ILWU) have struck a tentative agreement on a five-year contract that will cover workers at all U.S. West Coast ports.
The details of the deal are being held in confidence while the agreement awaits ratification by both organizations, but they acknowledge that a cooperative arrangement was reached with the assistance of U.S. Secretary of Labor Thomas Perez and Federal Mediation and Conciliation Service deputy director Scot Beckenbaugh. In a joint statement, PMA president James McKenna and ILWU president Bob McEllrath said the 29 West Coast ports “can now resume full operations.”
Backlogs and congestion are expected to continue for several more weeks, but the Port of Oakland says it hopes both sides of the new agreement will commit to full productivity during the ratification process. After a short labor slowdown after the Friday agreement was announced, Oakland’s seaport appeared to have resumed normal operations as of Sunday night. The other 28 West Coast ports appear to be back to normal and full operation. Truckers, however, will continue to face long delays at terminal gates depending on the time of day, the Port of Oakland says.
The nine-month dispute has left many cargo owners unable to fill overseas orders on time and subject to income loss and costs associated with the disruption. The president of the National Retail Federation, Matthew Shay, says manufacturers, retailers, farmers and transport businesses have all suffered, according to Lloyd’s Loading List. He adds that there must be a dedicated effort to prevent a repeat of this “nightmare scenario.”
Part of the PMA/ILWU agreement includes changes to arbitration rules, Perez told reporters in a conference call. There are currently four regional arbitrators who serve as judges in disputes between employers and unions. That will change, he said, but the details are not being released yet.
With the resumption in operations, West Coast ports will see an uptick in activity that will be enhanced by the expansion in cargo transport volume that is happening in many countries. Port operators may face a need for insurance adjustments as traffic, employee and machinery demands increase. Errors and omissions can occur as operators are under pressure to speedily reduce port backlogs, and accidental damage or equipment breakdown could become more likely with intensified operations, especially if maintenance is sacrificed for efficiency.
At Roanoke Trade, your insurance needs associated with changing operations and traffic volume can be smoothly handled. Our professionals have both coverage solutions and risk management advice that can alleviate some of the friction and uncertainty that accompanies intensified workload at ports and terminals.
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Sources: Lloyd’s Loading List, Fox News, Wall Street Journal