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Progress Reported in West Coast Port Labor Contract Talks

Although a full contract agreement has not been reached, the International Longshore and Warehouse Union (ILWU) and the Pacific Maritime Association (PMA) announced this week that they have tentatively agreed to terms on health benefits.

In a joint news release issued Aug. 26, the parties said they “have reached a tentative agreement on terms for health benefits, subject to agreement on the other issues in the negotiations. The parties have agreed not to discuss the terms of this tentative agreement as negotiations continue.”

Although no terms of the tentative agreement on health benefits were disclosed, it is still viewed as a breakthrough by many shipping industry observers. Peter Tirschwell of the Journal of Commerce noted:

“With the potentially explosive health care issue settled, it is very possible at this point that the two sides will coast to a final agreement in short order. Health care was the sticking point, because the so-called Cadillac plans enjoyed by union members will incur a roughly $150 million annual tax under Obamacare. Someone had to pay it, and neither side wanted to. How the issue was resolved is still under wraps, but it seems unlikely the two sides would have issued a statement on Tuesday saying they ‘have reached a tentative agreement on terms for health benefits,’ if all they did was postpone resolution of the issue until 2018 when the new taxes kick in.”

The ILWU-PMA negotiations affect 29 ports in California, Oregon and Washington. The previous labor contract expired July 1, but both sides have pledged to keep West Coast ports operating until a new contract agreement is reached.