According to multiple media sources, the current contract between the Pacific Maritime Association (PMA) and the International Longshore and Warehouse Union (ILWU) will actually expire on July 1 at 5PM Pacific time, rather than the June 30 timeframe originally reported. A June 4 joint press release by the PMA and ILWU stated that their current labor agreement would end on June 30 at midnight; however, both parties have since confirmed to the Journal of Commerce that the actual expiration is on July 1 at 5PM PST / 8PM EDT. According to an article published by Bloomberg (citing a study by Martin Associates of Lancaster, PA), operations from U.S. West Coast ports contribute to 12.5% of U.S. gross domestic product (GDP).
As negotiations continue, both parties appear resigned to the fact that talks may extend beyond the July 1 deadline. At this time, labor disruption does not appear imminent. "The parties have been negotiating and will continue to negotiate," stated Craig Merrilees, a spokesman for the ILWU, on June 30. "They will try to reach an agreement by the expiration date, but will continue beyond that time if necessary. Previous agreements have required negotiating beyond the contract expiration date."
Outstanding issues surrounding the ILWU/PMA contract, which governs roughly 20,000 dockworkers at 29 ports, reportedly include wage levels, safety concerns, and jurisdiction over port work performed by state employees. Health care has also become a major concern, as neither party seems willing to accept responsibility for an estimated cost of $150 million annually that will come into play in 2018, with the advent of the Cadillac tax under the Affordable Care Act. An impasse on this issue may prompt the parties to ratify a three-year labor agreement (as preferred by the ILWU), essentially tabling discussions on the tax until 2017.
SPARX logistics will continue to monitor this situation and keep our customers informed of the latest developments. If you have any questions or concerns related to specific shipments, please contact your SPARX representative.