News / Shippers 'relieved' as PMA and ILWU reach tentative agreement

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Shippers have applauded the news that the PMA and ILWU have reached a “tentative” agreement on a new six-year contract at 29 west coast ports.

The National Retail Federation (NRF) said today it was “relieved”. President and CEO Matthew Shay said: “On behalf of the retail industry, we are relieved to see the parties have come to a tentative mutual agreement on a long-term contract … ending over a year of negotiations and uncertainty. A new agreement provides stability to the supply chain and assurance to the millions of businesses and employees who rely on smooth and efficient operations from the West Coast ports.

“The West Coast ports are a critical artery for retailers and other businesses into the US market. We urge the parties to quickly ratify the tentative agreement to bring certainty back to the West Coast ports. It is essential to begin the negotiation process early for the next labor contract and avoid a future lapse in continuity.”

The deal could take some time to ratify, however. The ‘tentative’ deal agreed with the White House over the potential rail strike took months: the Presidential Emergency Board was convened in July; an agreement broadly agreed in September; and it was signed off in December.

The ILWU/ PMA agreement came after Julie Su, the Biden administration’s acting labor secretary, “assisted” in the deal agreement, after the White House was pressured into intervening, by a range of organisations including the NRF.

The details of the deal will not yet be released, and it seems likely that the two sides will still have some issues to thrash out.

A statement from the ILWU and PMA said the agreement was still subject to ratification by both sides.

“We are pleased to have reached an agreement that recognises the heroic efforts and personal sacrifices of the ILWU workforce in keeping our ports operating,” said PMA president James McKenna and ILWU president Willie Adams.

“We are also pleased to turn our full attention back to the operation of the west coast ports.”

Shippers can start to relax. In the past week, there has been an overall increase of 13% in dwell times for the five major west coast ports, according to FourKites. Tacoma, Oakland and Seattle saw the greatest rise, with dwell times up 87%, 43% and 24% respectively – but they were still lower than the March peak.

Cargo flows had already started to shift. In May, the number of shipments going to west coast ports was down 41%, with only 35% of US imports going to the west coast. At LA and Long Beach, average shipment volumes in a month have declined by 18% and 17% compared with the start of the year.

UPDATED 14.50 GMT WITH NRF COMMENT