West Coast ports shut after union workers walk off job over wages

West Coast ports are closing due to unionized “non-show workers” after negotiations with port management break down.

The Port of Oakland was closed Friday morning due to a shortage of workers for terminal operations, and the downtime is expected to last through at least Saturday. A source close to the situation told CNBC that port closures are expected to extend across the West Coast as a result of a shortage of sufficient labor as workers protest wage negotiations in contract talks with port management.

Port of Oakland spokesman Robert Bernardo said two of the Port of Oakland’s marine terminals — SSA, the largest, and TraPac — were closed as of Friday morning. He pointed out that most of the imports and exports take place through those ports.

While the actions taken by the workers are not officially a strike, the source told CNBC to expect pauses at other West Coast ports as unionized workers refuse to report for assignments, with operations also halting at the Los Angeles Port Center, including the Phoenix Marine, terminal. APL, and the port of Hueneme, which handles cars and perishables — bananas are the biggest imports in that category. The situation remains volatile, with truck drivers being turned away from Los Angeles locations.

In an ILWU press release, International President Willie Adams said the talks “did not collapse” and added, “We will not settle for an economic package that does not recognize the heroic efforts and personal sacrifices of the ITU workforce that has lifted the shipping industry to record profits.”

The halts come as activity at West Coast ports has picked up again after losing volume to East Coast ports due to concerns about the volatile labor situation.

In the Port of Auckland, total container volume has increased for two consecutive months, with port officials optimistic about the uptick. It is the eighth largest port in the country, importing a wide range of items, from Australian wine and meat, to aluminum from South Korea, Apparel and electronics Furniture from China.

“Given the increase in business we have seen over the past two months, we are optimistic about a stronger second half of 2023 in terms of the amount of cargo moving through Auckland,” said Brian Brands, Maritime Director for the Port of Auckland. “We also expect to increase the number of marine transportation services offered at the Port of Auckland in the coming months.”

“Oakland is a great port for US agricultural exporters,” said Peter Friedman, executive director of the Agricultural Transportation Coalition (AgTC). “Friday is a great day for Ag Export.”

Ports and unions have been involved in contract negotiations over the past year, adding to tensions in port operations.

On April 20, the Pacific Maritime Association, which represents ports, and the International Seashore and Stores Federation announced that they had reached a tentative agreement on some key issues, though they did not disclose more.

People familiar with the negotiation process told CNBC at the time that it represented a “huge progress.” Previous agreements included preservation of health benefits. But known issues still to be resolved include wages, as well as safety, automation and pension benefits.

The Palestinian Monetary Authority, which represents the management of ports, in a statement on Twitter Friday’s events were described as “coordinated and disorderly action” by the International Federation of Media.

The International Media Federation issued a statement on Friday saying that ordinary workers have taken it upon themselves to “express their discontent” amid the ongoing “uphill battle” with the port administration. The port’s shipping workers are “still in their jobs,” the ILWU said, but a port source told CNBC that there are generally not enough workers to sustain port operations. The ILWU statement didn’t specifically mention wages, but did mention “essential requests,” including health and safety, and the $500 billion in profits that shipping companies and terminal operators have made over the past two years.

The last outage at the Port of Oakland came in early November, when hundreds of employees quit their jobs over a wage dispute.

Closing any outlet creates backups affecting both pick up and delivery of products by truck drivers.

The truck drivers also had a layover related to California’s AB 5 legislation covering the classification of truck drivers as employees, a layoff that lasted five days but took two months to clear. ILWU did not cross this picket line.

In the Port of Auckland, over 2,100 trucks pass through the terminals each day, but none are expected during a Saturday with not enough manpower to service the trucks.