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U.S. West Coast Update: ILWU, PMA Vow to Continue Talks, Maintain "Normal Operations"

According to multiple media sources, the Pacific Maritime Association (PMA) and the International Longshore and Warehouse Union (ILWU) failed to reach agreement on a new West Coast labor contract by their original deadline at 5PM PST on July 1. Though the "no strike" clause in their previous contract no longer applies, the parties issued a joint statement that suggests neither a strike or a lockout are imminent.

The joint release states: "While there will be no contract extension, cargo will keep moving and normal operations will continue at the ports until an agreement can be reached…Both sides understand the strategic importance of the ports to the local, regional and U.S. economies, and are mindful of the need to finalize a new coastwide contract as soon as possible to ensure continuing confidence in the West Coast ports and avoid any disruption to the jobs and commerce they support."

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.