Photographer: Elaine Thompson/AP Photo
Economy

The West Coast Dock Crisis: What Happened, What's Next

The West Coast ports of the U.S. returned to full operations over the weekend after the Pacific Maritime Association, which represents management, and the 20,000-member International Longshore and Warehouse Union reached a deal Friday on a five-year contract, ending nine months of talks. It will take six to eight weeks to relieve cargo congestion at ports from San Diego to Bellingham, Washington, where productivity has been reduced by as much as half since November.  

U.S. retailers aren't yet seeing the West Coast ports as a viable option and will continue to divert shipments to other ports. The workers themselves haven't yet approved the agreement, and the cargo backlog will take time to clear, according to the National Retail Federation, a Washington-based trade group representing retailers, grocers and wholesalers. The ports are at risk of losing some business permanently.

What's at stake?

West Coast ports are responsible for more than 43 percent of U.S. trade, according to the Pacific Maritime Association’s annual report, and 12.5 percent of the U.S. gross domestic product. A closing would have cost the U.S. economy as much as $2 billion a day, the association said, citing figures from a 2002 lockout that lasted 10 days and cost roughly $1 billion a day.

How much does a dockworker make?

On Feb. 4, management made details of its contract offer public, including 3 percent annual raises and maintaining employer-paid health care and pension programs. The average unionized dockworker currently makes $147,000 a year, according to the management press release. 

The union disputes that figure, saying it assumes significant overtime and includes non-salary benefits. Most dockworkers take home less than $100,000 a year, it says. 

How did they reach a deal?

U.S. Labor Secretary Thomas Perez arrived in San Francisco last week to take part in talks and pushed for a resolution on the last significant roadblock, which was the union’s demand to be able to unilaterally fire arbitrators who hear workplace grievances. On Thursday, Perez gave both sides until Friday to come to an agreement or he would move the talks to Washington. The two sides agreed on a compromise he brokered that would replace the single arbitrator with a panel. The union and management have declined to release details of the tentative agreement, including wages and benefits, until it's presented to members.

These negotiations are always fraught. The 2008 talks — the only ones between 2002, when port employers ordered a lockout of the dockworkers, and the current brinksmanship — weren't especially acrimonious, but the talks are never done before the contract expires.  

What's happening at the ports right now?

Port operations began returning to normal by Saturday night as workers arrived to unload cargo. About 1,500 jobs were posted for the night shift Saturday at the union's dispatch hall in Wilmington, California. At the Port of Oakland, 11 vessels were at berth on Saturday, with three more at anchor and 13 in the Pacific Ocean outside San Francisco Bay awaiting berths. In Seattle, three terminals were full, with five vessels waiting to be unloaded. Another five were at anchor near the port, with seven more waiting near the Port of Tacoma. 

The Pacific Maritime Association, the bargaining agent for shipping lines, terminal operators and stevedores, had suspended cargo operations for six days in February — all weekends or holidays — instead of paying overtime for what it said was diminished productivity. Those actions had contributed to the backups.

What’s next?

Dockworkers will decide whether to approve the agreement. Ports will be working to relieve the backlog as vessels that have been anchored offshore fill their terminals. Some retailers will resume shipments to West Coast ports after diverting cargo to ports in the East Coast, Gulf Coast, Canada and Mexico. 

 

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