West Coast Port Labor Dispute ~ Tentative Agreement Reached!

Posted June 19, 2023
Category Company News
An agreement anticipated to bring stability to supply chains through West Coast ports for the foreseeable future was tentatively reached last week.  The agreement results in a sizeable pay increase and bonus structure for port workers on the West Coast.  The agreement results in an estimated increase in Dockworker pay of approx. 32% through 2028 and an estimated one-time bonus of approx. $70 million dollars in recognition of efforts and sacrifices made during the pandemic which is referred to as a “hero” bonus.

While the six-year agreement must be ratified by employers and dockworkers, includes improvements in benefits and other provisions reached after more than a year of contentious negotiations that led some importers to divert shipments away from West Coast ports and led to fears of greater impact on U.S.-Asia trade flows. 

The agreement comes on the heels of recent random labor slowdowns and disruptions in various ports along the West Coast including Los Angeles, Long beach, Oakland and Seattle which garnered the attention of the Biden Administration.

The International Longshore and Warehouse Union (ILWU), which represents more than 22,000 West Coast dockworkers, as well as employers involved in the labor talks, declined to disclose details of the agreement. 

Those in the know, say the deal is slated to give dockworkers a raise of approx. $4.62 an hour in the first year of the contract—essentially a 10% wage increase—plus an additional $2 per hour in each subsequent year. Terms of the agreement call for retroactive wage increases dating back to July 1 as the current contract expired last summer.

Regarding the $70 million bonus, the dockworkers’ union had pushed to double pay over the course of the contract when the talks turned to wages in May. Dozens of dockworkers died keeping ports open during the depths of the Covid-19 pandemic as surges in cargo delivered tens of billions of dollars in profits for the world’s largest ocean carriers, who are mostly based overseas. 

President Biden said Wednesday that dockworkers had “served heroically through the pandemic” and will “finally get the pay, benefits and quality of life they deserve.”

The basic hourly pay for a dockworker last year was $46.23 with the average full-time dockworker last year earned more than $200,000.

U.S. retailers and manufacturers altered their supply chains for movement through East Coast and Gulf Coast ports for fear of a possible strike.  West Coast ports are optimistic the agreement will offer the peace of mind needed to enable Exporters and Importers to once again shift their supply chains back through West Coast ports.

The ILWU said the ratification process would take a few months. 
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