While the clock continues to tick on the looming December 29 deadline in Master Contract labor negotiations between the International Longshoremen’s Association (ILA), the largest union of maritime workers in North America, and the United States Maritime Alliance (USMX), an alliance of container carriers, direct employers, and port associations serving United States-based East and Gulf Coasts, there still is a fair amount of acrimony on both sides.
As previously reported, a major sticking point in the negotiations between the ILA and USMX has to do with how the ILA has to negotiate all Master Contract issues with the ILA Wage Scale Committee, which ILA President Harold Daggett said in an August letter to USMX Chairman and CEO James Capo is a democratically-elected committee that Capo has declined to address despite Daggett’s overtures to do so.
Another issue has to do with technology. USMX’ Capo maintains that the ILA is demanding that management guarantee a job for any worker even if new technologies eliminate a need for that position. Capo also noted that the current Collective Bargaining Agreement mandates that both sides negotiate over the impact new technology might have on the work force.
In late October, the United States Federal Mediation and Conciliation Service (FMCS) said that the concerns were back at the negotiating table, following a late September announcement that the ILA and USMX agreed to extend the collective bargaining agreement, which was due to expire on September 30 for a ninety-day period through December 29. Following the October meetings, FMCS Director George H. Cohen said that “the parties will have their respective committees review their positions and analyze associated costs. Meanwhile, the parties’ subcommittees will continue to meet in an effort to resolve additional outstanding issues.”
The USMX issued a statement today, explaining it does not feel that the ILA is making an effort to fully work with them in coming to a resolution.
“Throughout the course of the negotiations, USMX has given due consideration to ILA demands and shown its willingness to compromise on issues such as automation and chassis repair,” said USMX Chairman and CEO James A. Capo. “It is disappointing that ILA negotiators have refused to give the same consideration to issues that concern USMX and the employers it represents. It’s incredible that they continue to defend antiquated work rules, manning and other practices that have made many of the East and Gulf Coast ports prohibitively expensive, harming our ability to compete and threatening the viability of port operations.”
Capo also explained that the current economic reality demands that port efficiency and productivity need to improve, adding that it also requires that the USMX needs to control container royalty payments that have risen dramatically since they were first established in 1960, totaling $211 million in 2011 or an average of $10 per man hour. Employers are not seeking to eliminate these bonuses, he said, as they are looking only to cap them and use the extra money to help pay for benefits for ILA workers.
As for the ILA, its president Harold J. Daggett preventing a cap on container royalty is one of the key battles the ILA faces. The ILA announced on its web site today that it is calling for full Master Contract Wage Scale meetings with the USMX beginning on December 10 in Delray Beach, Fla. The meetings are slated to last three days, but the ILA said that they could continue if a contract can be reached.
“It is regrettable that USMX has engaged in misleading rhetoric and scare tactics during the time they should have been negotiating with the ILA,” said Daggett. “They put more effort into their media statements than in preparing contract documents. It’s not surprising since they invest in building new ships at nearly $200 million each, but don’t put a dime on the table in negotiations to compensate ILA members who helped them accumulate their riches. They deliberately term Container Royalty a ‘Bonus’ when they know it’s a wage supplement. A wage supplement that was negotiated in good faith by the ILA and its employers for the sacrifices made by ILA members.”
Dagett added that the USMX has made it clear in negotiations and to the public through their website postings (USMX.com) that they are looking to cut, as an example, an ILA member in Savannah’s Container Royalty payment and eliminate an eight hour guarantee for an ILA member in Houston
“They attack work rules in New York and look to strip the seven-man lashing gang in the South Atlantic. We understand that USMX has continually played one port against the other but that strategy will not succeed,” he said. “Our ILA is committed to protecting all ILA members affected by this contract. We stand united and will put a full contract package together that meets all our goals at all ports.”
A Northeast-based shipper told LM that in anticipation of a possible strike her company had done an inventory review and arranged to bring in inbound inventory ahead of time, coupled with discussing alternate routes with the company’s freight forwarders.
That approach could be quite tenuous, though, she said, as many other shippers were taking similar steps.
“It is a tough situation,” said the shipper. “When you have lead times of 45 days in some cases, it can make it hard to plan inventory that far ahead in advance, especially when it became clear that this situation was not going to be quickly resolved. And there is not alternate sourcing in the U.S. [for our products].”
Dealing with long lead times, coupled with September 30 deadline, created unchartered waters for shippers in this case. This was likely to lead to shippers considering some modal shifts—to air for partial quantities, for example—to better navigate the labor standstill and still could if further progress is not made by the new December 29 deadline.
