West Coast dock worker contract talks to extend past deadline: ‘Everyone is holding their breath’

The 22,000 West Coast dock workers who load and unload most of the region’s cargo ships are not likely to reach an agreement with their employers by July 1— the expiration date for their current contract.

The likelihood of federal intervention from the Biden administration undermines the possibility that the dockworkers, represented by the International Longshore Warehouse Union (ILWU), will strike.

However, the union has alternative labor actions at its disposal to potentially throttle the speed of the West Coast’s ports. The threat of a deliberate “slowdown” has caused Seattle-based freight companies to divert cargo away from the Port of Seattle, according to Peter Ku, Seattle-based branch manager at OEC Group, a global freight forwarder.

“Everyone is holding their breath,” Ku told MyNorthwest.

The OEC Group is actively encouraging some of its clients with summer-shipment deadlines to route through alternative ports on the East Coast or the Gulf of Mexico.

The freight company has also encouraged certain clients to use air freight to avoid encumbered ports. For example, time-sensitive, pre-season NFL merchandise was flown in, which otherwise would have sat afloat in shipping containers outside of the Ports of Seattle and Tacoma.

Friction between the ILWU and the Pacific Maritime Association (PMA) is nothing new. In 2015, the suspension of port operations from Bellingham to San Diego over contract disputes forced federal intervention from the Obama administration.

Past Port of Seattle labor spat overhangs imminent West Coast dockworker contract talks

The difference now is that global supply chains in recent months have already been put under pressure by bottlenecked U.S. ports, although recent international trade volumes have declined over Chinese COVID-19 lockdowns, with Shanghai port only opening June 1.

That has prompted the Biden administration to preempt the expiration of the dock worker contract, creating the “Supply Chain Disruptions Task Force” last year, headed by current Transportation Secretary and former naval intelligence officer Pete Buttigieg.

Earlier in June, the ILWU and PMA met with President Biden aboard the Battleship U.S.S. Iowa in California.

“The parties discussed with the President several issues, including supply chain congestion and their shared commitment to reach a collective bargaining agreement that is fair to both parties,” an ILWU-PMA joint statement reads.

“Both the PMA and the ILWU agree that they are unlikely to reach a deal before the July 1 expiration of the current agreement,” the statement continues.

What do stalled contract talks mean for Pacific Northwest consumers?

The ILWU represents dock workers at 29 U.S. ports, responsible for handling roughly 40% of container shipping out of East Asia.

Despite the raw volume of imports that come through the West Coast — the Port of Seattle set a record in 2021 for most Chinese imports in a year, according to Ku — businesses are better prepared this time around for potential labor actions that might throttle the port’s capacity.

Not only have companies begun to preemptively divert some cargo away from the West Coast — US imports of Asian products through the West Coast plummeted in the early parts of 2022, according to the Journal of Commerce — but U.S. demand for imports is declining.

“Import volumes [through the Port of Seattle] have decreased drastically … demand will just not be there,” Zu added.

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