The potential extension of the West Coast longshore union contract and an extended period of stability is encouraging.
A DECISION by the West Coast longshore union to consider extending its current contract is encouraging for the trade-dependent Northwest.
Discussions are tentative and just beginning. But the welcome signal from the International Longshore and Warehouse Union (ILWU) could mean more stability for a regional economy that was battered by port slowdowns that ended last year.
Similar discussions began last year on the East Coast, where the longshore union agreed to discuss extending its contract up to seven years, to 2025.
Stability from a longer contract would benefit workers, public ports, terminal operators, shippers and exporters.
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It would help the Northwest Seaport Alliance and the 48,000 jobs supported by its marine-cargo operations in Seattle and Tacoma. A longer-term contact could also help the alliance secure an operator to run Seattle’s Terminal 5, which is being upgraded for larger ships.
Many of the parties involved are still feeling effects of the major port slowdowns that occurred when the current contract was being negotiated, in 2014 and early 2015.
The slowdown affected cargo flowing through West Coast ports with an economic impact of more than $2 trillion, nearly 13 percent of the country’s gross domestic product, according to the Pacific Maritime Association (PMA) representing shippers and terminal operators.
A contract, extending to 2019, was finally reached after President Obama sent his labor secretary, Thomas Perez, to intervene directly.
Effects of the slowdown spread through the economy, hurting communities across Washington state, where 40 percent of jobs are linked to international trade.
Washington businesses lost an estimated $769 million because of the slowdown, according to the Washington Council on International Trade.
Northwest apple and pear industries, which export about a third of their crop, lost an estimated $100 million. They also had to restore business with overseas customers who turned to suppliers in places like China and New Zealand when the Northwest U.S. supply was interrupted.
Nobody wants another disruption, especially as West Coast ports are fighting for market share amid a slowdown in Asia trade and new competition, including from the expanded Panama Canal.
After the heads of the ILWU and the PMA discussed the possibility of a contract extension in April, U.S. Reps. Dave Reichert and Dan Newhouse penned a letter thanking them for their “early engagement on this issue that has serious implications for the economy of our region and the country as a whole.”
ILWU delegates gathered earlier this month and agreed to discuss “the concept of a contract extension” with PMA. ILWU represents 20,000 workers from Bellingham to San Diego. They earned an average of $161,000 last year, according to PMA.
Over the coming decade, West Coast shipping will be challenged by Asian market changes, competition from other regions, the Panama Canal expansion and technology bringing more automation to the waterfront.
Locking in a strong contract that provides certainty for employers and consistent wage increases and benefits for workers would be a smart move benefiting all sides.