West Coast Port Labor Contract Update

Negotiations resumed Dec. 2 between the Pacific Maritime Association (PMA) and the International Longshore and Warehouse Union (ILWU) on a West Coast port labor contract – the first meeting between chief negotiators since Nov. 20.

On Dec. 4, Journal of Commerce reported that the ILWU will convene a caucus the week of Dec. 15 to examine provisions of a proposed new contract. At that time, ILWU leadership may seek authorization to sign a tentative contract (which would subsequently be subject to a vote of its membership), or decide to return to the negotiating table. The latter option would likely push negotiations – which began in May with a late-July target date for completion – into 2015.

In a small bit of good news for exporters, the Federal Maritime Commission (FMC) announced that 15 ocean carrier members of the Transpacific Stabilization Agreement have agreed to forego imposition of any port congestion surcharges until 2015. More details are available in this FMC news release.

In mid-November, several carriers announced that they would implement port congestion surcharges on containers arriving at West Coast ports. Some carriers also announced surcharges (though at a lower rate) for outbound shipments leaving these ports. However, most carriers postponed implementation following pushback from customers and requests by the FMC for more information justifying the surcharges.