Upcoming negotiations between West Coast dockworkers and the Pacific Maritime Association is putting shippers on edge as the July 1 expiration of the six-year labor contract looms. The International Longshore and Warehouse Union represents 13,600 dock workers on the West Coast. The big sticking point in this year’s talks will be who pays for a so-called “Cadillac tax” that comes due in 2018 under Obamacare on the most lucrative of health care plans which is what the longshoremen currently have. That price tag could be as high as $150 million.
Other issues expected to come up in the negotiations include jurisdictional ones over who performs dock jobs for PMA members in the West Coast’s 29 ports and competitive ones that could shift some business to other ports on the East Coast, Canada, Mexico or elsewhere. Los Angeles and Long Beach ports make up about 85 percent of the container volume in the west. Another hot-button issue is the port’s handling of turn times for trucks that load and unload at the terminals. Wait times at the terminal gates can be several hours, with long lines of trucks forming on roads leading into the port creating a safety hazard. A west coast port work stoppage would create not only a shortage of goods but also a shortage of trucks across the country. Shipper contingency plans should include broadening your carrier base, exploring alternatives to truck transportation and allowing for longer lead times to get shipments covered, particularly in the long haul market. An increase in prices is almost a certainty. In times of tight equipment and rising prices a 3rd Party Logistics provider can be a valuable partner. Contact Land Link today and be prepared!