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No contract yet as West Coast dock contracts expire

By Justin Pritchard

Associated Press

LAST UPDATED: 07:18 a.m. HST, Jun 22, 2014

LOS ANGELES >> The West Coast ports that are America's gateway for hundreds of billions of dollars of trade with Asia and beyond are no stranger to labor unrest and even violence.

Now, the contract that covers nearly 20,000 dockworkers is set to expire, and businesses that trade in everything from apples to iPhones are worried about disruptions just as the crush of cargo for the back-to-school and holiday seasons begins.

With contentious issues including benefits and job security on the table, smooth sailing is no guarantee.

On one side is the International Longshore and Warehouse Union, with its tradition of fierce activism dating to the Great Depression, when two of its members were killed during a strike. On the other is the Pacific Maritime Association, which represents shipping lines and operators of terminals at 29 West Coast ports.

Both acknowledge that they are unlikely to agree on a new contract before the current one expires June 30, but they plan to negotiate past that deadline. That would fit the pattern from contract talks in 2008 and 2002. In 2002, negotiators didn't reach an agreement until around Thanksgiving, following an impasse that led to a 10-day lockout and a big disruption in trade.

The union's total control over the labor pool means huge bargaining leverage, which negotiators have parlayed into white-collar wages and perks for blue-collar work. A full-time longshoreman earns about $130,000 a year, while foremen earn about $210,000, according to employer data. Workers pay nearly nothing for health coverage that includes no premiums and $1 prescriptions.

Neither side has publicly discussed progress on negotiations that began May 12 in San Francisco, which is headquarters to the union and the maritime association.

Twelve years ago, the shutdown had a lasting impact on how products moved in and out of the United States. Hulking cranes idled. Ships anchored in San Francisco Bay and outside ports from Los Angeles to Seattle. Economists estimated the impact at $1 billion each day.

Even after trade resumed, retailers -- with their just-in-time supply chain -- worried that West Coast ports risked becoming a bottleneck. Companies looked to Gulf Coast and East Coast ports, which courted them by upgrading facilities.

"They can't afford to have their goods hung up either out on the sea or on the docks," said Jonathan Gold, vice president of supply chain and customs policy at the National Retail Federation.

Between 2002 and last year, the portion of shipping containers that came into the U.S. through West Coast ports dropped from 50 percent to 44 percent, according to a study by Martin Associates, a firm that analyzes transportation systems. Imports to the Gulf of Mexico and the Northeast increased.

Even so, West Coast ports handled cargo worth $892 billion in 2013 alone, according to trade data compiled by the U.S. Census Bureau.

Worries over the current negotiations have prompted some stores to route shipments away from the West Coast, Gold said. Other importers planning for fall and winter shopping have shipped early to beat the contract's expiration date.

The maritime association warns that labor peace is essential to keeping West Coast ports competitive, especially with an expansion of the Panama Canal that will allow larger vessels to reach East Coast markets directly.

The union is not persuaded, at least not publicly.

"The competitiveness argument is an old saw that gets trotted out every time there's a negotiation," said union spokesman Craig Merrilees. "The claim has generally been used in an effort to extract concessions from the union members."

One area where the Pacific Maritime Association is looking for concessions is benefits. According to the PMA, the cost of benefits more than doubled over the past decade, reaching $93,200 per registered worker in fiscal year 2013.

During these negotiations, a new incentive is in play: In 2018, a 40 percent tax on the value of "Cadillac" health plans above a certain threshold kicks in under the Affordable Care Act -- and the union's coverage qualifies.

Last July, workers and retirees picketed in Long Beach and in Tacoma, Washington, complaining that some families were shouldering tens of thousands of medical bills the health plan was not paying.

Employers said legitimate claims were being paid, but they were scrutinizing tens of millions of dollars of treatments that were likely fraudulent, including phantom appointments and charges for cosmetic surgery.

Other bargaining issues include what jobs will remain under union control, the introduction of technology that could make some jobs obsolete, and on-the-job safety measures.

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Manawai wrote:
This is why we need an exemption from the Jones Act. Without it we remain hostage to union greed and corruption.
on June 22,2014 | 08:08AM
Wazdat wrote:
on June 22,2014 | 08:40AM
jimbone wrote:
Lose the jones act , and the company ( walmart, Foodland,Sears ) will keep all the profits. Or maybe they might give you 10cents off from your bag of rice. Haha
on June 22,2014 | 10:36AM
tigerwarrior wrote:
Speaking of Walmart, they planned ahead for West Coast dock shutdowns by building a 4-million-square-foot distribution center in Houston Texas--using the port of Houston to bring in their goods.
on June 22,2014 | 02:32PM
HawaiiCheeseBall wrote:
Yes we want Aorking american to ean Chinese level wages.
on June 22,2014 | 11:20AM
tigerwarrior wrote:
And does this mean that I won't be able to find any Made in China products stocked on the shelves of my local retailer LOL? Another good reason to purchase non-food items at Amazon and eBay.
on June 22,2014 | 02:35PM
Uncleart66 wrote:
Why? They help pay for our elected officials good times.
on June 22,2014 | 08:49AM
false wrote:
Here we go again, better start looking for alternatives. This could become a huge, they will use us as hostages....see it coming. But, Mr. President, won't let them walk....hopefully.
on June 22,2014 | 08:55AM
tigerwarrior wrote:
If you've been keeping up with the news--they are definitely looking at all the options. Case in point: the expanding of the Panama Canal to accommodate shipping lines from China en route to a massive shipping port in the Gulf of Mexico--coupled with the expansion of rail lines to bring products into and out of the U.S. If the longshoremen unions continue to play games--they will in the near future--continue to lose business--as is already evidenced by the drop in percentage of products being imported/exported from West Cost ports.
on June 22,2014 | 02:43PM
localguy wrote:
You do understand the Panama Canal is already undergoing the expansion process, perhaps the new canal open 2015/6.
on June 22,2014 | 08:17PM
jimbone wrote:
Haha, funny article. Everyone see's how much they make, but no one sees the 10hrs a day, 7 days a week they work. I would make the same if I worked 70 hrs a week at my job ( construction)
on June 22,2014 | 10:30AM
einouye wrote:
Yup. Long hours, times when no off-time and shipments MUST be unloaded....Funny how the anti union talkers can talk so easily too. Look back at history and keep the judgement grounded. Easy to talk, try to do the walk before you infer....
on June 22,2014 | 01:57PM
tigerwarrior wrote:
The union bashers must also take into consideration that in the past, there were a lot more stevedores than longshoremen operating our shipping ports--hence the very generous wage and benefits package. That being said, while I believe it's fair to bargain for a living wage, these unions may end up losing everything if they get too greedy via privatization. And it won't be entirely the fault of the unions either. Equal blame for the demise of this industry can by placed on corporate globalization, cheap labor and short-sighted foreign policy. The Mexicans will not be undersold.
on June 22,2014 | 03:07PM
localguy wrote:
Long hours my o k o l e. They work in shifts, know what they signed up for. Truth is ports in Japan, Singapore, other countries are far more professional and efficient than ours. No sick union attitude. Just hard working people doing their job, not whining like our union baboozes do.
on June 22,2014 | 08:19PM
saywhatyouthink wrote:
I don't care how long you work, driving a forklift does not warrant 130K a year with 93K in benefits. Everyone can see why a box of Cereal cost 7.00.
on June 22,2014 | 05:07PM
localguy wrote:
Some of them do not even have a high school diploma, all from who you know.
on June 22,2014 | 08:20PM
Hawaii5OhOh wrote:
Time to go Costco and stock up on toilet paper, rice, and Spam.
on June 22,2014 | 12:47PM
tigerwarrior wrote:
I'm pretty surprised that the kind of hoarding we normally see during an approaching hurricane/tsunami/West Coast port shutdown at big-box retailers such as Costco and Sams Club was virtually nonexistent.
on June 22,2014 | 02:47PM
tigerwarrior wrote:
Raw materials exported finished goods imported = Banana Republic.
on June 22,2014 | 02:55PM
saywhatyouthink wrote:
ILWU needs to be broken, these wages and benefits are just outrageous and contribute to the high cost of everything. I'm all for a fair wage for workers but they are already being over paid for the type of work they perform. The employer should break the union, replace them if you have to. You'd be surprised how many of them would take a 50% cut in pay in order to keep their jobs. No one else will pay even that much for blue collar work.
on June 22,2014 | 05:02PM
localguy wrote:
Another of thousands of examples how some unions think they are Gods. All shall bow down to them and give them what ever they want. Bunch of red headed, snot nosed, clueless, spoiled brats who need a good trip to the woodshed. All new employees should have fallen under the 401k plan and they should pay at least half of medical. Sad day when you can earn a six figure salary and never completed high school. Got your job from who you know. Way overpaid, under worked.
on June 22,2014 | 08:16PM
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