Prioritizing Dockworkers Upholds U.S. National Security
The MOC
By
Nicholas Weising
May 11, 2023
The shipping industry’s failure to recognize West Coast workers’ best interests has exacerbated labor negotiations and opens a security threat in a global economic chokepoint. The Pacific Maritime Association (PMA), representing container shipping companies, and the International Longshore and Warehouse Union (ILWU), representing dockworkers, announced a tentative agreement on select issues, coming more than a year after their previous contract expired. The tentative agreement is confidential, but labor contract negotiations are still ongoing regarding wages and automation. The prospective collective bargaining agreement would apply to more than 22,000 workers in 29 U.S. West Coast ports, including two of the busiest ports in the nation: the ports of Los Angeles (LA) and Long Beach (LB).
This comes amidst heightened tensions between the two parties. In the afternoon of April 6th and on the morning of April 7th, crane operators and drivers did not show up for their assigned shifts. Every terminal in both ports was forced to all suspend operations for roughly 24 hours due to the shortage. Workers who did show up were sent home. This backed up many commercial ships which could not use the ports, causing delays. For instance, Maersk said four of its vessel services were affected by the labor shortage. PMA accuses ILWU Local 13 (which represents LA and LB longshoremen) of instructing its members to withhold labor to disrupt the flow of imports. The ILWU claims that Thursday night marked their monthly union meeting which ran long due to an election, and the longshoremen who skipped work the next day did so in observance of Good Friday. If PMA is correct, though, then Local 13 essentially conducted a brief strike.
The collective bargaining agreement included a no-strike clause, but since the longshoremen work under no contract, there is not much PMA can do to respond. Their previous labor contract expired last July. We are approaching one calendar year where the longshoremen have been working with under contract. Union members are reasonably angered at this. Working under no contract means an employer does not have to recognize union shop aspects of contract so new employees need not join the union or pay dues. An employer can also refuse to arbitrate grievances on matters that occurred after the contract expired, making it harder to fight unfair discharges and disciplining. Prima facie, it benefits both ILWU and PMA to work out a contract.
The biggest point of contention is automation: PMA wants to expand usage of remotely controlled cranes yard tractors. They claim that making this transition will enable West Coast ports to “remain competitive, facilitate both cargo and job growth, and reduce greenhouse-gas emissions to meet stringent local environmental standards.” These concerns fall on deaf ears. Unions are beholden to their dues-paying members and so are concerned with their wellbeing above all else. They do not necessarily prioritize CO2 emissions or remaining competitive with overseas ports.
Commentators argue that ILWU should embrace automation. This too misses the point. Union leaders (like all economic actors) make decisions on the margin and so see automation as leading to significant job loss in the short term. PMA representatives can argue until they are blue in the face that automating cranes will lead to more jobs in the future, but people act based on short-term consequences. Experts rightfully point out that technological progress replaces jobs with more higher-paid, productive jobs in the long term, but that is cold comfort to current longshoremen. They will not be the ones to occupy these latter roles. Worker retraining routinely fails. With recent advances in AI, it is possible that remotely-controlled functions will be abandoned in favor of cranes and tractors that operate completely independently. Thus, automation will lead to less union dues and potentially lead to membership ousting union leadership in a union election. Asking ILWU to accept automation is asking them to work directly against their interests.
It is unlikely ILWU will bend on this issue, considering how aggressive they have been. Last month, dockworkers reportedly began taking their lunchbreaks simultaneously, seemingly to disrupt work, which effectively shut down ports from noon to 1 PM daily. The ILWU is also fighting another union, the International Association of Machinists and Aerospace Workers (IAM) over whether they have jurisdictional claim over 25 port mechanics in Seattle. The NLRB ruled that they are rightfully represented by IAM, but the ILWU promises to fight this further. The ILWU appealing this decision may spill out into a messy jurisdictional fight, and it demonstrates ILWU’s increased pugnacity. This, however, is also about automation. Buried within the NLRB panel decision, it mentions that only three West Coast container terminals have already automated their equipment operations or are expected to in the future, but the fear for ILWU is that terminals where it is not present will automate.
It also seems possible that PMA is not overly incentivized to negotiate with ILWU. Ocean container rates have fallen off a cliff compared to the height of the pandemic. With that said, disruptions to the supply chain caused by labor action slows vessel turnaround times and reduces capacity. This keeps ocean container rates artificially inflated, despite what demand signals would indicate an equilibrium price to be. This is speculatory, but ILWU has been negotiating with PMA since May 2022. There is still no agreement. It has been one year since the last contract expired.
Having no labor agreement is a major liability to the U.S. economy. The National Retail Federation highlights that “West Coast ports…are pivotal entry points to the U.S. that allow American consumers access to global products and essential goods.” They are not kidding: one million tons of cargo enter through PMA West Coast ports daily which helps contribute to 9% of total U.S. GDP. The Agricultural Transportation Coalition warned that U.S. agriculture or forest products can be sourced elsewhere, and foreign customers will buy elsewhere if the U.S. cannot deliver dependably and cheaply. For the sake of keeping shelves stocked for U.S. consumers and staying competitive in the primary sector of the economy, having a PMA-ILWU labor agreement is desirable.
Comparatively, the great national security risk is underappreciated. Should labor relations deteriorate such that strikes break out at ports or even if the situation remains as murky as it is now, it will seriously impact the rate of intaking needed materials. The U.S. was 100% net import reliant on rare earth elements in 2018, importing an around 11,130 metric tons of metals and compounds that are used in everything from computer wiring to magnetic resonance imaging. Raw materials like crude oil, grain, and iron ore can only be feasibly transported by using breakbulk or container shipping; planes, trains, and automobiles cannot efficiently carry large amounts of those resources. The pandemic crisis revealed a blind spot, showing just how fragile our supply chains are. PMA trying to wait out ILWU to get automation concessions becomes more of a national security liability every day. A labor contract is beneficial for both parties and the nation. Promoting U.S. shipping, shipbuilding, and port competitiveness is key to fostering future U.S. national security.
Nicholas Weising is an intern at the Center for Maritime Strategy. An undergraduate in the School of Industrial and Labor Relations at Cornell University, his primary research interests include national security, defense industrial policy, and labor relations.
The views expressed in this piece are the sole opinions of the author and do not necessarily reflect those of the Center for Maritime Strategy or other institutions listed.
Center for Maritime Strategy
By Nicholas Weising
The shipping industry’s failure to recognize West Coast workers’ best interests has exacerbated labor negotiations and opens a security threat in a global economic chokepoint. The Pacific Maritime Association (PMA), representing container shipping companies, and the International Longshore and Warehouse Union (ILWU), representing dockworkers, announced a tentative agreement on select issues, coming more than a year after their previous contract expired. The tentative agreement is confidential, but labor contract negotiations are still ongoing regarding wages and automation. The prospective collective bargaining agreement would apply to more than 22,000 workers in 29 U.S. West Coast ports, including two of the busiest ports in the nation: the ports of Los Angeles (LA) and Long Beach (LB).
This comes amidst heightened tensions between the two parties. In the afternoon of April 6th and on the morning of April 7th, crane operators and drivers did not show up for their assigned shifts. Every terminal in both ports was forced to all suspend operations for roughly 24 hours due to the shortage. Workers who did show up were sent home. This backed up many commercial ships which could not use the ports, causing delays. For instance, Maersk said four of its vessel services were affected by the labor shortage. PMA accuses ILWU Local 13 (which represents LA and LB longshoremen) of instructing its members to withhold labor to disrupt the flow of imports. The ILWU claims that Thursday night marked their monthly union meeting which ran long due to an election, and the longshoremen who skipped work the next day did so in observance of Good Friday. If PMA is correct, though, then Local 13 essentially conducted a brief strike.
The collective bargaining agreement included a no-strike clause, but since the longshoremen work under no contract, there is not much PMA can do to respond. Their previous labor contract expired last July. We are approaching one calendar year where the longshoremen have been working with under contract. Union members are reasonably angered at this. Working under no contract means an employer does not have to recognize union shop aspects of contract so new employees need not join the union or pay dues. An employer can also refuse to arbitrate grievances on matters that occurred after the contract expired, making it harder to fight unfair discharges and disciplining. Prima facie, it benefits both ILWU and PMA to work out a contract.
The biggest point of contention is automation: PMA wants to expand usage of remotely controlled cranes yard tractors. They claim that making this transition will enable West Coast ports to “remain competitive, facilitate both cargo and job growth, and reduce greenhouse-gas emissions to meet stringent local environmental standards.” These concerns fall on deaf ears. Unions are beholden to their dues-paying members and so are concerned with their wellbeing above all else. They do not necessarily prioritize CO2 emissions or remaining competitive with overseas ports.
Commentators argue that ILWU should embrace automation. This too misses the point. Union leaders (like all economic actors) make decisions on the margin and so see automation as leading to significant job loss in the short term. PMA representatives can argue until they are blue in the face that automating cranes will lead to more jobs in the future, but people act based on short-term consequences. Experts rightfully point out that technological progress replaces jobs with more higher-paid, productive jobs in the long term, but that is cold comfort to current longshoremen. They will not be the ones to occupy these latter roles. Worker retraining routinely fails. With recent advances in AI, it is possible that remotely-controlled functions will be abandoned in favor of cranes and tractors that operate completely independently. Thus, automation will lead to less union dues and potentially lead to membership ousting union leadership in a union election. Asking ILWU to accept automation is asking them to work directly against their interests.
It is unlikely ILWU will bend on this issue, considering how aggressive they have been. Last month, dockworkers reportedly began taking their lunchbreaks simultaneously, seemingly to disrupt work, which effectively shut down ports from noon to 1 PM daily. The ILWU is also fighting another union, the International Association of Machinists and Aerospace Workers (IAM) over whether they have jurisdictional claim over 25 port mechanics in Seattle. The NLRB ruled that they are rightfully represented by IAM, but the ILWU promises to fight this further. The ILWU appealing this decision may spill out into a messy jurisdictional fight, and it demonstrates ILWU’s increased pugnacity. This, however, is also about automation. Buried within the NLRB panel decision, it mentions that only three West Coast container terminals have already automated their equipment operations or are expected to in the future, but the fear for ILWU is that terminals where it is not present will automate.
It also seems possible that PMA is not overly incentivized to negotiate with ILWU. Ocean container rates have fallen off a cliff compared to the height of the pandemic. With that said, disruptions to the supply chain caused by labor action slows vessel turnaround times and reduces capacity. This keeps ocean container rates artificially inflated, despite what demand signals would indicate an equilibrium price to be. This is speculatory, but ILWU has been negotiating with PMA since May 2022. There is still no agreement. It has been one year since the last contract expired.
Having no labor agreement is a major liability to the U.S. economy. The National Retail Federation highlights that “West Coast ports…are pivotal entry points to the U.S. that allow American consumers access to global products and essential goods.” They are not kidding: one million tons of cargo enter through PMA West Coast ports daily which helps contribute to 9% of total U.S. GDP. The Agricultural Transportation Coalition warned that U.S. agriculture or forest products can be sourced elsewhere, and foreign customers will buy elsewhere if the U.S. cannot deliver dependably and cheaply. For the sake of keeping shelves stocked for U.S. consumers and staying competitive in the primary sector of the economy, having a PMA-ILWU labor agreement is desirable.
Comparatively, the great national security risk is underappreciated. Should labor relations deteriorate such that strikes break out at ports or even if the situation remains as murky as it is now, it will seriously impact the rate of intaking needed materials. The U.S. was 100% net import reliant on rare earth elements in 2018, importing an around 11,130 metric tons of metals and compounds that are used in everything from computer wiring to magnetic resonance imaging. Raw materials like crude oil, grain, and iron ore can only be feasibly transported by using breakbulk or container shipping; planes, trains, and automobiles cannot efficiently carry large amounts of those resources. The pandemic crisis revealed a blind spot, showing just how fragile our supply chains are. PMA trying to wait out ILWU to get automation concessions becomes more of a national security liability every day. A labor contract is beneficial for both parties and the nation. Promoting U.S. shipping, shipbuilding, and port competitiveness is key to fostering future U.S. national security.
Nicholas Weising is an intern at the Center for Maritime Strategy. An undergraduate in the School of Industrial and Labor Relations at Cornell University, his primary research interests include national security, defense industrial policy, and labor relations.
The views expressed in this piece are the sole opinions of the author and do not necessarily reflect those of the Center for Maritime Strategy or other institutions listed.