Longshoremen contract deal averts US West Coast supply chain crunch

The Pacific Maritime Association and International Longshore and Warehouse Union have arrived at a six-year contract agreement that will cover 22,000 union dock workers at all 29 major ports along the U.S. West Coast.

The ILWU and PMA, which began negotiating the deal 1 July, declined to elaborate on its details, but it apparently includes a sharing of the surge in pandemic-era cargo profits in the form of retroactive compensation for employees, Reuters reported. It remains subject to ratification by the union.

That agreement, announced 15 June, should forestall concerns about a supply chain crunch being caused by labor strikes.

"We are ... pleased to turn our full attention back to the operation of the West Coast ports,” PMA President James McKenna and ILWU President Willie Adams said in a joint statement. 

"No shows" by members of the International Longshore and Warehouse Union to protest the lack of a contract agreement had resulted in congestion and delays in cargo deliveries. Importers were preparing to deal with shortages and higher prices as the dispute escalated, according to the Financial Times.

While the average price for shipping a container from Asia to the U.S. West Coast rose 19 percent to USD 1,569 (EUR ) in the week preceeding the agreement, that price was still down 85 percent year-over-year, according to freight data provider Freightos.

Still, the labor agreement was momentous enough for even U.S. President Joe Biden to issue a statement upon its announcement.

“I congratulate the port workers, who have served heroically through the pandemic and the countless challenges it brought, and will finally get the pay, benefits, and quality of life they deserve,” Biden said in a release.

U.S. Labor Secretary Julie Su aided in the deal-making process following calls from the U.S. Chamber of Commerce and other national business organizations for the Biden administration to get directly involved in the negotiations.

"The tentative agreement delivers important stability for workers, for employers, and for our country's supply chain," Su said.

Photo courtesy of Felipe Sanchez/Shutterstock