Remember last week when we said the wildcard for 2023 was the uncertainty revolving around the West Coast and its nearly yearlong contract negotiations?

Even though the industry is up against other issues, like gluttonous inventories and carrier desperation, a new contract, or lack thereof, remains the top concern in international shipping as no one appears to have a firm understanding on when the two parties will shake hands.  

Well, there’s finally some news.

Yesterday, the International Longshore and Warehouse Union (ILWU), the representative party for WC dockworkers, announced that it had reached a “tentative agreement” on “certain key issues” with the Pacific Maritime Association (PMA), representing WC employers.

The two parties have been at an impasse since negotiations began May 10, last year. Last summer, the previous contract expired, which has left some 22,000 dockworkers without a deal for the past several months.

This is the first time in months that the public has received some sort of update from either party on the status of ongoing talks and it’s positive.

“Certain key issues” sounds like they finally met halfway on problems, like robots, that they have been at odds with.

The only debate left is what color pen should be used to sign the new and awesome contact.

The West Coast is just a couple days out from a final deal that will bring peace and cargo back to key ports, like Seattle, Los Angeles, and Long Beach.

Why doesn’t this announcement add up?

None of that’s true. It doesn’t add up and here’s why.

Wasn’t a joint statement

Yesterday’s statement came only from the desk of ILWU. The PMA had no part in what was released to the press.

The union’s public announcement also vastly differs from previous statements made over the past year, which were jointly released with the PMA.

Announcement came right as confirmation hearing for new labor secretary began yesterday

There’s no official labor secretary, right now. The previous one, Marty Walsh, left for ice hockey in February.

However, his hopeful replacement, Julie Su, appeared yesterday as the Biden administration’s nominee to be the country’s next Secretary of Labor.

Su, who has been acting labor secretary since Walsh’s resignation, has been in frequent contact already with the West Coast. Port of Los Angeles Executive Director Gene Seroka praised her for being “on the phone with us morning, noon, and night”.

The position serves as an envoy between the White House and the West Coast. Like many shippers are urging, the government may intervene and apply some pressure on the stalling talks.

ILWU’s decision to release this promising statement ahead of Su’s hearing could be strategic as the nominee is seen as a pro-labor pick—a favorable selection for the union.

The word “tentative”

Tentative. When’s the last time you heard that word and something actually went to plan? Think about how many dates, parties, or other events were ultimately cancelled once that word was placed in front of them.

Dating life aside, apply tentative to logistics. Last year, the rail industry saw the true meaning of what this word often spells out.

Back in September, rail unions and freight railroads tentatively agreed to a new labor contract. At the time, everyone believed a deal was reached as what lay ahead appeared to be simple formalities.

Flash forward three months later to December. The tentative deal still hadn’t closed.

The government ultimately had to step in and forcibly forge an agreement—a result that neither party desired.

Actions speak louder than words

ILWU’s announcement does not pair well with recent job-related actions that forced operations to shut down at the ports of Los Angeles and Long Beach. Union dockworkers failed to show up for shifts on a back-to-back night and day shift.

Ironically, this is first direct disruption at the southern Californian ports since the talks began last May, however that doesn’t dismiss its timing—a couple weeks before this promising announcement.

Final Thoughts

Of course, these are observations. While we believe there’s more progress left to be made than what this announcement suggests, maybe the two parties have brilliantly turned the corner. Maybe by the time this newsletter is found in spam folders on Monday, a new West Coast contract will be met.

As always, InterlogUSA will continue to monitor the situation closely and provide updates when they come.