(Bloomberg). It may take several months for a labor deal to be reached between 22,000 dockworkers at US West Coast ports, and their employers, but service disruptions during negotiations are unlikely, according the chief of Port of Los Angeles.
“It’s not going to get solved in the next few weeks — it will probably take some several months and there is no hard deadline on this,” Executive Director Gene Seroka, whose port is the nation’s busiest, said in an interview at Bloomberg’s New York headquarters Monday. He added that his view doesn’t represent those of employers or the union negotiating on behalf of the workers.
The International Longshore and Warehouse Union and more than 70 employers represented in the Pacific Maritime Association began negotiating a contract for 22,000 West Coast dockworkers and continued to do so even after their previous agreement expired July 1.
The parties have said they’re committed to avoiding a repeat of the nine months of disruptions and shipping delays that ensued when they last negotiated a full contract in 2014 and 2015. The Obama administration intervened to end the snarls.
Seroka said he isn’t worried about the chance the parties will fail to reach a deal. “I think the probability of work disruption is extremely low,” he said.
The talks take place as the world’s 11 biggest container lines are on course to post $256 billion in profit in 2022, which would exceed last year’s record by 73%, according to industry veteran John McCown, the founder of Blue Alpha Capital. The windfall has been buoyed by labor and logistics strains, which are squeezed to capacity amid sustained US import demand.
“These dockworkers have real issues on the table and worked through the pandemic like many others did,” Seroka said. “The industry has made a tremendous amount of money over the last three years — that money should be shared.”
He stated that worker protections must be established based on the lessons learned from the pandemic and that automation and robotics at the ports — which will continue to be rolled out — are polarizing issues in industrial-relations.
“We’re going to continue to move faster with technology development — we just cannot leave the worker behind,” Seroka said. “If we keep those postulates together, we’ll get through this in good order.”
Los Angeles is the main gateway for containerized commerce with Asia. It handles 40% of all US imports along with the Port of Long Beach.
Both operations handled record volumes during pandemic. Homebound consumers switched spending to goods over services. But, the numbers have slowed as Americans shift more resources to services and importers divert cargo to East Coast ports to avoid a repeat Covid-era supply-chain logjams.
Southern California ports haven’t seen any service degradation while the talks have been ongoing, but East and Gulf Coast maritime hubs are seeing more cargo “based on the perception of this contract negotiation,” Seroka said.
“We’ve got to give people confidence that their cargo is not going to get snarled up, and they will have some consistency in their supply chain,” the LA port chief said. “I’d love to see this contract done,” he said, adding, “I get no satisfaction whatsoever by seeing ships and anchor in Houston and Charleston, in New York, because that’s making our country less competitive economically.”