Work contract ends at US West Coast port, raising risks for talks

LOS ANGELES (Reuters) – The union and employers negotiating a new contract for more than 22,000 workers at the U.S. West Coast port said the high-stakes talks that the industry is closely watching and the White House said will continue after the deal expires late. Friday.

The agreement covers 29 Pacific Coast ports stretching from California to Washington state that handle nearly 40% of US imports. Any business slowdown or shutdown could upset the nation’s already troubled supply chains, stoke inflation, and exacerbate pressure on a weakening economy that drives down President Joe Biden’s acceptance rates.

“While there will be no contract extensions, shipments will continue to move, and normal port operations will continue until an agreement is reached,” the Employer Group of the Pacific Maritime Union (PMA) and the International Longshore and Warehouse Union (ILWU) said. In a joint statement.

“Both sides understand the strategic importance of the ports to the local, regional and US economies, and bear in mind the need to conclude a new coastal-level contract as soon as possible,” PMA and ILWU said before the contract expires at 5pm. Pacific time on Friday (0000 GMT on Saturday).

When the contract expired, the “no-strike” clause also expired, said Peter Terschwill, vice president of Navy, Commerce and Supply Chain at S&P Global Market Intelligence.

Hours before expiration, more than 150 business groups appealed to Biden to lobby for a smooth and fast solution.

Groups representing industries from agriculture and apparel to trucking and toys have asked the president to work with the Palestinian Monetary Authority and the International Water Federation to extend the contract, commit to ongoing negotiations in good faith, and avoid any activity that could cause further unrest.

The labor standoff has been on Biden’s radar for months. He took the unusual step of meeting with the International Federation of Ruling Women and the Palestinian Monetary Authority in Los Angeles on June 10. His labor minister is conducting weekly inspections with the two sides, which began talks in May. Read more

“We’ve never had a White House revolve around these negotiations the way they are now,” Terschwill said.

The last business contract negotiations at the West Coast port collapsed in 2015 after nine months. Port workers have been out of work for eight days, increasing trade flows and draining an estimated $8 billion from the Southern California economy alone. President Barack Obama sent his own Secretary of Labor to reach an agreement.

Automation of container traffic at ports, resulting in fewer jobs, appears to be a major problem in current talks. Neither side has specifically identified the problem, but the PMA and ILWU have released dueling studies on the impact of automation and the circulation of vitriol in the media.

In a June 14 statement, the Palestinian Monetary Authority and the International Media Federation said they were not planning any shutdown or shutdown that would exacerbate the current shipping crisis. Read more

However, cautious shippers risk no chance. They direct cargo away from the West Coast to avoid potential labor-related slowdowns, particularly at the nation’s busiest seaport complex in Los Angeles/Long Beach. This increases costs and contributes to backup operations at ports in New York/NJ, Savannah and Houston. Read more

(Reporting by Lisa Bertlin in Los Angeles Editing by Margarita Choi, Alistair Bell and Leslie Adler

Our criteria: Thomson Reuters Trust Principles.