West Coast Update: Port Negotiations Approaching Gridlock

February 5, 2015 - After a nine month long negotiation, unless the union and the association can reach agreement on a multi-year contract, the operation of West Coast maritime container terminals may gridlock, according to James McKenna, chief executive of the Pacific Maritime Association.

The former contract between the PMA and the International Longshore Workers Union expired July 1, after which, the two groups had agreed to work under the terms of the old agreement. Work at terminals from the Pacific Northwest to Southern California began slowing down last fall. McKenna stated that the economic health of the nation is at risk because of the slowdown and the possibility of a lockout.

The negotiation points continue to be wage increases, health care plans, and pension benefits.

If the association imposes a lockout, President Barack Obama could order both sides back to work for an 80-day cooling-off period during which negotiations would continue. If no agreement is reached by the end of that period, Congress would determine a settlement.

Addressing U.S. port congestion will be the Federal Maritime Commission’s top priority in 2015, FMC Chairman Mario Cordero advised commission staff.

“Among the commission’s statutory goals is the assurance of an efficient ocean transportation system,” Cordero said in a statement. “The efficient operation of the nation’s ports is squarely within that mandate and paramount to the commission’s responsibilities.”

The FMC held four regional hearings last fall to gather information about port congestion. Issues raised at the hearings included port congestion and demurrage charges for late pickup of containers at terminals that are too congested for truckers to enter, and uncompensated waiting time for drayage drivers stuck in lines outside terminals.

For more information, see the Journal of Commerce website: http://www.joc.com/port-news/us-ports/us-maritime-regulator-chief-addressing-port-congestion-top-2015-priority_20150116.html

Please be assured that AIReS is monitoring the situation closely and will advise any changes. If you have any questions, please contact your AIReS representative.

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