Supply Chain Matters provides added highlights on a new development involving labor unrest among U.S. West Coast dockworkers, and on an ongoing period of labor activism across global supply chains.

 

After multiple consecutive days of periodic ship unloading and loading operational disruptions that have impacted various U.S. West Coast port facilities and industry supply chains, the Biden Administration requested and both sides have agreed to a cooling-off period.

According to reporting by The Wall Street Journal, U.S. Labor Secretary designate Julie Su shuttled between labor union and port owners groups earlier this week and sought this cooling off period in attempts to keeping lines of communication more open towards a settlement goal. Reportedly, dockworkers have agreed to pause job actions through the end of this week.

As noted in our prior commentary, both the Pacific Maritime Association (PMA) and the International Longshoreman’s Labor Union  have been in labor contract renewal talks since May of 2022. Reportedly both sides had reached agreement on utilization of automation and employee benefits with the last major hurdle being new wage levels, which was originally expected to be resolved this week.

The WSJ, citing sources familiar with the negotiations, indicated that dockworkers have initially sought to double their wages over the six year period of a new contract. In-turn, port operators reportedly “expected to award large pay increases, including more than 10% raise in the first year of the new contract.” These disclosures are obviously interesting, since both sides initially agreed not to publicly disclose details of the negotiations.  Hence the need for a cooling off period.

Industry association have been seeking the Biden Administration to appoint an independent mediator, but the White House indicates the need for both parties to continue toward reaching a mutually agreeable settlement.

 

Labor Activism Should Not Be a Surprise

If readers have been able to keep-up with our post-pandemic commentaries, they would probably note a discernable tone of global supply chain related labor activism coming out of the highly disruptive pandemic period.

Supply chain operational teams were deemed essential to public and economic help and thus were required to work long hours and endure health risks in doing so. Now, as various labor contract renewal milestones occur, workers have been rather active and vocal.

In the past few months there have been labor actions involving various European and United Kingdom ports. European rail workers have initiated organized work stoppages in seeking higher pay and benefits.

In September of last year, a U.S. railway operational suspension involving upwards of 60,000 workers was averted after a marathon 20-hour overnight bargaining session. The agreement eventually included a 24 percent wage increase to be spread over five years, including 14.1 raise effective upon contract ratification.  One of the most significant obstacles in the negotiations was rail workers a complete lack of sick leave benefits.

Last week, The Wall Street Journal published a report: Railroads Offer Paid Sick Leave, Better Work Conditions, After Yearslong Efficiency Push. (Paid subscription or metered view) Reported is that three major U.S. railroads have subsequently reached agreement with labor unions to provide for at least four days of sick leave annually. Further reported are agreements with labor unions to offer train crews more predictable rest schedules. One specific passage indicated the following:

“A new labor pact late last year didn’t quell discontent among rank-and-file employees at several railroads. The companies continued to face pressure from politicians and union leaders to enhance workers’ quality of life. They also fielded complaints from customers and federal officials to improve rail service, which they have associated with worker shortages. Union leaders said they are now seeing a shift in how railroad operators are engaging with employees.”

 

Beyond shipping and rail, employees among airlines, air freight carriers and logistics firms are also seeking recognition for the contributions made. UPS and the Teamsters labor union are now in negotiations for labor contract renewal and besides wages, there are other issues on the table such as air conditioning systems in parcel delivery vans. Amazon workers at the company’s headquarters campus recently staged a brief walkout over reported dissatisfaction with a new back-to-office mandate and the online retail provider’s reported cutting back on a zero emissions timetable.

What is especially telling about global-wide dockworker contract negotiations are their reference to the windfall profits that ocean container shipping lines reaped during the past two years. Shipping lines have paid bonuses to their own employees and staff, and provided lucrative added stockholder cash dividends and stock buybacks. That is not being ignored in labor circles as are demands from shipping lines for added port and container handling automation.

Labor activism is yet another implication of post-pandemic business environments and cannot be swept aside. As to when such an agreement is consummated seems unclear as is whether dockworkers will escalate work disruptions to strike actions.  Government leaders as politicians are more attuned to prevailing sentiment of voters as well as businesses.

 

Bob Ferrari

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