ILA May Give Shippers the Summertime Blues

If supply chain managers are starting the summer in a cranky mood, it’s easy to see why.

Three days before the Memorial Day break, shippers using the Port of New York and New Jersey had an unwelcome surprise. The International Longshoremen’s Association conducted extra-thorough safety inspections of chassis and containers, causing hours-long delays for truckers.

Before the truck lines cleared, ILA President Harold Daggett stirred the pot further. He said negotiations on a new coastwide labor contract were on hold after United States Maritime Alliance refused his demand to guarantee jobs for workers displaced by technology. Daggett advised union officers to inform members to “prepare themselves for any action we may have to take if USMX’s position does not change.”

For users of East and Gulf Coast ports, it was not conducive to a relaxing holiday weekend.

Labor disruptions at ports are the last thing importers and exporters need. They already have enough to worry about. The eurozone is on the verge of imploding, China’s economic growth is slowing, and U.S. housing and employment numbers remain abysmal. A dock strike this fall would be disastrous.

No one expected this year’s ILA negotiations to be easy. Daggett, elected union president less than a year ago, has an ambitious agenda. Despite a pay and benefit package that’s among the best of any blue-collar industry, he says the ILA has been too accommodating in past contract negotiations. He views automation and technology as a threat to the ILA’s future.

USMX Chairman and CEO James Capo argues that East and Gulf Coast ports need technology to achieve the productivity needed to increase cargo volume that will generate ILA jobs. Employers also are seeking other efficiencies, especially in the high-cost Port of New York and New Jersey.

The union-management differences are substantial but not insurmountable. The ILA and USMX will eventually reach agreement. In collective bargaining, both sides have a responsibility to represent their members and negotiate the best deal they can. But the key word is negotiate.

Capo has criticized Daggett’s insistence that USMX accept ILA demands on job guarantees before negotiations resume, and who can blame him? Bargaining is give-and-take, and setting preconditions on the talks does not suggest good faith.

It’s still early June, more than 100 days before the current contract expires on Sept. 30, but shippers are growing antsy. They must decide soon whether, when and how to reroute cargo to avoid peak-season disruptions. It’s a tough call, complicated by the threat that the International Longshore and Warehouse Union’s Office Clerical Unit will picket ILWU-manned terminals on the West Coast.

The clock is ticking, but the ILA and USMX have room for compromise and time to achieve one, if both sides are willing to bargain in good faith. If they’re not, we’re in for a long, hot summer.

Contact Joseph Bonney at Follow him on Twitter @josephbonney.

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