ILWU Issue (Updated on 5/17)

Let's take a look at the labor-management negotiations between the International Longshore and Warehouse Union (ILWU) and the Pacific Maritime Association (PMA), which will greatly affect the container freight rate market in the second half of this year.

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1. Overview

 

 The ILWU-PMA negotiations started on May 10, 22, and the main issue is the expansion of port automation. ILWU is expected to see the operating profit of shipping companies and strongly raise wages. Therefore, if the negotiations break down, it is expected to put an additional burden on the logistics network. So, let's take a brief look at what's going on right now.

 

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2. Main contents of negotiations

 

 ILWU is optimistic about the contract negotiations with the PMA and expects to conclude negotiations before the contract expires. The current contract expires on 6/30 this year. In addition, the NRF is requesting that there be no further aggravation factors for congestion in the Western Port. If congestion occurs additionally in the western US port, it is emphasized that there is a possibility of switching to the eastern US port in general.

 

 In other words, it seems that the negotiations began promptly, as all logistics personnel are burdened with container shipping rates, which have risen too high compared to the previous year.

 

 In particular, as the contract expires during the peak summer season, they are urging for an amicable negotiation. After negotiations in '15 and extension of the term in '17, renegotiations started after 7 years. However, since negotiations take place during a busy time, there are concerns about congestion if negotiations fail.

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 3. Conclusion

 

 Media and public interest in the negotiations has increased due to delays in e-commerce delivery in the US and the start of the peak season. Accordingly, the President of the United States (Biden) is also urging companies to take an interest in the labor market and call for an amicable settlement.

 

 The key issues will be salary increase and opinions about job reduction/operational efficiency increase due to port automation. It is also an unavoidable trend to move to port automation according to the 4th industrial revolution, and if the negotiations break down, both sides are at risk, so it is expected to be reached without a major strike.

 

If there are any future updates, we will continue to share them.

 

 

Thanks.