Commentary: ILA Talks Hit a Snag — What Now?

What happened? That’s what many shippers and others are wondering after this week’s sudden breakdown in negotiations on an International Longshoremen’s Association contract for East and Gulf Coast dockworkers.

Less than a month ago, the ILA and United States Maritime Alliance were talking optimistically about a strike-free deal. They’d agreed on two of the toughest issues — automation and chassis maintenance and repair.

The outlook abruptly darkened Wednesday when the two sides suspended negotiations, and ILA President Harold Daggett says a strike is likely when the current contract expires Sept. 30.

What changed? The answer is fairly simple. Management officials had been saying for a couple of years they were determined to address productivity and efficiency improvements, particularly in the high-cost Port of New York and New Jersey. Before resuming negotiations this week, USMX asked the ILA to agree to discuss “archaic” practices such as round-the-clock pay for some New York-New Jersey dockworkers. Daggett refused, complaining that employers were seeking to undo years of union bargaining gains.

At an impasse, the ILA and USMX canceled a scheduled three-day bargaining session and returned home from Delray Beach, Fla. Bargaining also was suspended on local contracts, including the crucial one for New York-New Jersey.

Will the ILA actually strike? It’s possible but not certain. There’s still time for renewed negotiations and a last-minute deal, but the clock is ticking fast. At this point, the signs aren’t positive.

If the ILA does strike, what can we expect? Past performances offer limited guidance. For most supply chain managers, an ILA strike would be more akin to the West Coast port lockout in 2002 than the ILA’s last coastwide work stoppage in 1977. Today’s supply chains are more complex, more international, and more just-in-time than when Jimmy Carter was in the White House and a 2,000-TEU ship was considered large.

An East and Gulf Coast port shutdown this fall would be a disaster for supply chains and a setback for the fragile economy.

How would Washington react? Would the Obama administration upset its labor allies by seeking a Taft-Hartley Act injunction that sends the union back to work for an 80-day “cooling-off” period? Or would it risk economic upheaval just five weeks before election day?

What about shippers? They’re not at the bargaining table but may have the biggest stake. They face tough choices between unpalatable alternatives. Some have begun diverting cargo on a limited scale, but most seem to be accelerating peak-season shipments and hoping any strike will be short — or better yet, non-existent.

Contact Joseph Bonney at jbonney@joc.com. Follow him on Twitter @josephbonney.



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