West Coast ports could shut down in 5 to 10 days

Port congestion in crisis

Traffic at nearly 30 West Coast ports is on the verge of "complete gridlock" and shipping officials have threatened to stop paying dockworkers if a contract deal is not reached soon.

Speaking at a press conference on Wednesday, Pacific Maritime Association CEO James McKenna said West Coast seaports, which handle some $1 trillion in trade per year, could shut down in the next five to 10 days and cripple U.S. trade with Asia.

He said the organization is not considering a technical "lockout," but warned that the shipping system would inevitably bring itself to a stop if congestion persists.

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PMA and the International Longshore & Warehouse Union have been working to negotiate new contracts since May. Nearly 20,000 dockworkers at 29 ports are impacted.

PMA says ILWU has conducted slowdowns, walk-offs and other actions at key ports, aggravating congested conditions and disrupting cargo movement in a bid to influence the talks.

He said productivity had dropped between 30 percent and 50 percent in recent months, crippling whole strings of vessels, in some cases. It's like "they're getting paid to grind us into the ground," McKenna said.

The union denied the claims and said the congestion crisis was "employer-caused."

The Port of Los Angeles
Tim Rue | Bloomberg | Getty Images

This is the second time in recent memory that the employers have threatened to close ports at the final stages of negotiations, the union said.

"Closing the ports at this point would be reckless and irresponsible," ILWU President Robert McEllrath said, adding that the groups are "extremely close" to reaching an agreement.

"We've dropped almost all of our remaining issues to help get this settled—and the few issues that remain can be easily resolved."

The PMA laid out the details of its latest contract offer to ILWU, which included $174,000 in annual compensation and full healthcare coverage. McKenna said the organization was "barging well beyond our comfort zone," calling the offer the best it could come up with.

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In addition, workers would see their wages rise about 3 percent annually and the maximum ILWU pension would rise to $88,800 per year as part of the proposed five-year contract.

The union has long been concerned with issues of jurisdiction and automation. Workers want guarantees about future work, which the contract proposal doesn't appear to address, industry observers say.

McKenna said automation has not been "front and center in these negotiations at all."

However, he added that there were still six major issues to left to overcome, including issues involving the arbitration process, turnover agreement and pensions.