International Longshore and Warehouse Union
For the past ten days, the International Longshore and Warehouse Union (ILWU) has kept 22,000 dockworkers throughout the West Coast on the job without a contract after their previous deal expired July 1. Meanwhile, the ILWU is carrying out talks with the Pacific Maritime Association (PMA), in which the Biden administration is heavily involved. Behind the scenes, the ILWU is working diligently with the port operators to ram through a sellout contract. On July 1st, another joint statement from ILWU and PMA confirmed: “While there will be no contract extension, cargo will keep moving, and normal operations will continue at the ports until an agreement can be reached between the Pacific Maritime Association and the International Longshore and Warehouse Union.” In other words, the ILWU and PMA are working together to avoid any strikes/lockouts.
California independent contractor law AB5
The California trucking sector prepares for the adoption of Assembly Bill 5 (AB 5). “Most immediately, motor carriers must evaluate and adopt alternative operating models to mitigate risk if they intend to continue to do business in California” according to the Benesch law firm on the decision of the U.S. Supreme Court’s decision to not review the case of California Trucking Association vs. Bonta. This ruling creates an opening for the imposition of AB 5, a law on independent contractors that heavily leans towards classifying independent contractors as employees. This would put about 70,000 truck owner-operators in legal limbo further risking supply chains. More than 70% of truckers serving some of the country’s largest ports including Los Angeles, Long Beach, and Oakland are owner-operators, and AB 5 will govern their relationships with carriers, brokers, and shippers.
Class 1 Railroad contract negotiations
The 30-day cooling off period initiated on June 18, after nearly two years of contract negotiation with Class 1 railroads is approaching its end on July 18. At any point during the remaining days, President Biden could appoint a Presidential Emergency Board (PEB). This would then initiate a second cooling off period at which point the parties could choose to accept or reject the PEB’s recommendations. If any of the parties were to reject the recommendations, or the cooling off period expires, then either party may employ self-help. If an agreement is not reached after the cooling-off periods end, then congressional intervention could be the only option to prevent a national shutdown. It is apparent that rail shippers do not want to wait until then. On July 1, a letter was sent to President Biden from a coalition of rail shipper CEOs saying they are “deeply concerned” about the possibility of a work stoppage if a negotiated solution to the current rail contract negotiations fails to occur. The letter stated, “we urge the Administration to take action to facilitate a workable settlement and prevent catastrophic disruptions to the freight rail network.” The letter noted the importance to all sectors of the economy that these parties reach an agreement and avoid any disruptions to the supply chain.
If you have any questions, please contact your local Noatum Logistics representative.