Letter from the Editor

By Mark Szakonyi

“ The Biden administration ’ s role in the West Coast negotiations didn ’ t go unnoticed by the ILA .”

US labor secretaries have been key to breaking deadlocks in longshore labor negotiations , including on the West Coast in 2015 and 2023 . But this latest impasse , threatening a strike at East and Gulf coast ports , forces the White House to walk a particularly precarious line : Don ’ t upset union voters ahead of a presidential election while protecting the economy and an image of responsible economic stewardship .

The slowing but still expanding US economy — voters ’ top election concern — can hardly afford labor disruption impacting $ 588 billion in annual trade , according to S & P Global Market Intelligence . Yet the White House can ’ t be seen as not respecting the collective bargaining process and can ’ t intervene before the International Longshoremen Association ’ s ( ILA ) contact expires at midnight on Sept . 30 . The ILA , which has yet to endorse a presidential candidate , has pledged to strike Oct 1 . if a new contract isn ’ t reached .

The ILA and waterfront employers in past bargaining cycles have been able to reach agreement on a new contract or an extension before the deadline , with no strike since 1977 . This time it ’ s looking less likely that one side will capitulate in the final hour , amid the waning peak season .

Until recently , the White House has focused more on West Coast labor negotiations , where the International Longshore and Warehouse Union ( ILWU ) — the ILA ’ s counterpart that is widely seen as more militant — can do more damage to supply chains from Asia . However , the ILWU kept working beyond its contract expiration — albeit slower due to tit-for-tat actions with employers ; the ILA won ’ t .

There ’ s been less outreach from the White House to the ILA and the employer group US Maritime Alliance ( USMX ) than with their West Coast counterparts during the latter ’ s past two bargaining cycles , according to two people familiar with negotiations . Then-Labor Secretary Marty Walsh began stressing the importance of a West Coast deal early on during visits to the ports of Los Angeles and Long Beach in November 2021 , and later the ports of Seattle and Tacoma in April 2022 .

Commerce Secretary Gina Raimondo and Transportation Secretary Pete Buttigieg were also involved in West Coast talks . Importantly , Walsh ’ s successor , Julie Su , is credited with pushing both sides to reach a tentative agreement in June 2023 .

The Biden administration ’ s role in the West Coast negotiations didn ’ t go unnoticed by the ILA . President Harold Daggett told locals in last November that President Joe Biden forced the ILWU ’ s hand in accepting a deal .

That same month , Daggett met with former president Donald Trump to “ hear what he had to say .”

During a longshore negotiating cycle , the While House has generally followed a familiar script in coaxing and then pressuring longshore labor and employers to reach a deal , according to one source involved in past bargaining on behalf of employers .

The Labor Department first tells both sides it will be monitoring negotiations . If pressure needs to be ratcheted up , the Labor Department , with possibly their Commerce and Transportation counterparts in tow , calls a meeting with union and employer leaders to stress the importance of uninterrupted cargo flow to the national economy . The increased pressure from the White House on both sides can give longshore labor negotiators cover to agree to contract elements the rank-andfile might not normally support .

If that fails to break a deadlock , the White House can threaten to call leaders from both sides to Washington . Then-Labor Secretary Tom Perez did just that on Feb . 20 , 2015 , during a previous West Coast bargaining cycle ; the ILWU and Pacific Maritime Association agreed to a tentative deal later that day . Federal officials can also put pressure on employers by threatening to call the CEOs of major lines to Washington if a deal isn ’ t reached .

The federal government hasn ’ t needed to press too hard on past ILA negotiations , nor has there been a suspension of negotiations so close to a presidential election .

The nuclear option of invoking the Taft-Hartley Act to bring an immediate end to any strike by ILA will be weighed against the political harm caused to the Democrats ’ courting of union votes , the Retail Industry Leaders Association said in a recent statement . Amid a slowing economy with stalled job growth and heightened unemployment , President George W . Bush invoked Taft-Hartley to end a 11-day lockout at West Coast ports in 2002 .

The Biden administration ’ s decision will “ ultimately hinge on balancing the national economy against union interests ,” according to RILA .

Biden , who has prided himself as the most pro-union president in modern times , has shown a willingness to avert transport labor disruption . In late September 2022 , he stepped in during the final hours before union rail workers were set to launch a nationwide strike – less than two months before key mid-term elections — and brokered a tentative deal that was eventually approved by rank- and-file .

The political stakes are only higher now .

email : mark . szakonyi @ spglobal . com

4 Journal of Commerce | September 23 , 2024 www . joc . com