ILWU contract promises 32 per cent pay rise and $70 million pandemic bonus

Tug Boat Maneuvering Cargo Ship at Dockside in Port of Long Beach

Details have emerged regarding the tentative agreement announced on 14 June between the Pacific Maritime Association (PMA) and the International Longshore and Warehouse Union (ILWU).

According to the Wall Street Journal (WSJ), the six-year contract has stipulated a 32 per cent pay rise for dockworkers, alongside a one-time “hero bonus” of $70 million in recognition to those who worked through the turbulence of the pandemic.

With dozens of dockworkers losing their lives amidst COVID-19 while working towards generating unprecedented levels of profits for shipping carriers in that period, the dockworkers’ union had initially pushed for double pay over the course of the contract, reported WSJ.

Nevertheless, a settlement was arrived at, inking a host of other provisions and improvements, and now awaits ratification by both parties.

Both the ILWU, who represents more than 22,000 dockworkers, alongside the PMA, who represents employers at 29 ports from California to Washington state, have declined to disclose further details of the agreement.  

Those close to the situation, however, claim that the first year of the contract will see a 10 per cent wage increase of $4.62 an hour for dockworkers, which will be compounded with a further $2 an hour in each subsequent year thereafter.

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

READ: Dwell times spike amid US West Coast ports disruptions

The deal comes after a year-long labour dispute which saw ILWU registrants’ working without contract since 1 July 2022.

The new deal, however, includes wage increases that will apply retroactively back to this expiry date.

The latest port disruptions building up to the deal’s announcement saw several associations and shipping liners press for governmental intervention from the White House to help expedite negotiations and broker an agreement.

Despite warding off this pressure, the Biden Administration offered a less invasive hand, having deployed Acting Labor Secretary, Julie Su, to oversee contractual developments.

READ: Canada West Coast port labourers call to strike in unanimous vote

The long-standing tension between the ILWU and PMA prior to this settlement triggered a series of sporadic and periodic labour disruptions throughout the West Coast’s major ports, including the Ports of Los Angeles, Long Beach, Oakland, and most recently, the Port of Seattle.

Such disruptions led to a “significant surge” in container backlogs worth up to $5 billion, according to maritime analytics provider MarineTraffic.

Backlogs have also compelled importers to have rerouted their shipments to alternative destinations, particularly in the East Coast, leaving the US-Asia trade flow in a precarious state, according to the WSJ.

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