ILA Negotiations: Not Over Yet

What’s remarkable about the latest twists in the longshore labor negotiations for East and Gulf Coast ports is the muted reaction from shippers.

Maybe shippers are simply weary of being whipsawed by five months of contract expirations and strike deadlines since last September. Maybe they’ve decided they’re ready with contingency plans and that the pressure on their supply chains is diminished by the mid-winter slack season.

Surprisingly, some shippers we’ve heard from seem to be operating on the assumption that after the ILA and employers agreed on container royalties and a second contract extension in late December, a final contract was only a formality.

If they thought that, they’re mistaken. With less than nine days before the latest contract extension expires at 11:59 p.m. next Wednesday, these negotiations still have far to go.

Container royalties overshadowed everything else for several weeks last month. However, as we’ve said for months, the toughest issues in these negotiations are work rules and staffing levels in the supplemental local contract for the Port of New York and New Jersey.

Last week’s meetings between the ILA and the New York Shipping Association reportedly produced little headway on those issues. NYSA members are holding firm on their demand to change “archaic” work practices, some in place for decades, that require high levels of staffing and that pay workers when they’re not on the job. ILA President Harold Daggett has refused to budge on the work rules.

The standoff in New York-New Jersey has blocked agreement on the Maine-to-Texas master contract between the ILA and United States Maritime Alliance. The union and employers have been unwilling to sign off on a coastwide deal as long as the dispute in New York-New Jersey remains unsettled. Bargainers in other ports are marking time on their local negotiations until they see what happens in New York.

Daggett is determined to deliver a favorable contract in his first tour as the union’s chief negotiator. His strategy in negotiations seems to be to wait for management to yield to the union’s demands. Exasperated employers say the union has been bullheaded and unwilling to engage in give and take.

Usually by this point in ILA negotiations, container ship lines have grown anxious for a deal that avoids a strike, even if terms aren’t favorable. This time has been different. Even before bargaining began last spring, employers said they planned to take a tough line on costs and productivity. For the most part, they’ve stuck to that plan.

That brings us to this week’s renewal of federal mediated negotiations between the ILA and USMX. These bargaining sessions will be crucial in determining whether East and Gulf Coast ports are hit next month by their first coastwide work stoppage in 35 years.

Complete coverage of ILA-USMX negotiations

It’s widely expected that at some point, USMX will present the ILA with a final offer on a coastwide master contract. That could confront the union with a tough decision on whether to approve a lucrative agreement without a deal on work rules at the East Coast’s largest port.

ILA locals outside New York-New Jersey aren’t enthusiastic about striking to preserve staffing requirements and work rules that don’t apply in their own ports and that many local officials privately consider outlandish. But it seems unlikely that they’ll buck the union’s leadership by leaving New York-New Jersey high and dry.

That’s where things could get dicey. This week’s negotiations could play out in any of several ways. If bargaining stalls, the union could renew its threat to strike. Or fed-up employers could pressure the union by closing ports with a lockout, a step they considered last month. Or the two sides could announce yet another short-term extension, though there appears to be little enthusiasm for this option.

There’s one other possibility: With the federal mediator’s help, the two sides could decide they’ve had enough brinkmanship and that it’s time to work out a compromise that both can accept. That’s something shippers could get excited about.

We’ll know more soon.

Contact Joseph Bonney at jbonney@joc.com and follow him at twitter.com/JosephBonney.

 

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