When the president of the West Coast dockworkers’ union pledged full support to the International Longshoremen’s Association in this year’s contract negotiations, many shippers and carriers feared the worst. “We have your back,” Bob McEllrath, president of the International Longshore and Warehouse Union, assured ILA President Harold Daggett at The Journal of Commerce’s Trans-Pacific Maritime Conference in March.
McEllrath didn’t elaborate, but many cargo interests immediately worried about being caught in a vise between the ILA, which has just opened contract negotiations on the East and Gulf coasts, and the ILWU on the West Coast.
Those concerns may be overblown. Despite McEllrath’s expression of solidarity, the reality is that West Coast dockworkers can’t legally strike in support of their ILA brethren. The ILWU will provide plenty of moral support, but contractual and legal restrictions stand in the way of coordinated actions.
“There is a no-strike clause in the contract. It would be an illegal secondary boycott,” said Jim McKenna, president of the Pacific Maritime Association, the employers’ bargaining organization on the West Coast.
Secondary boycotts are attempts by a union to apply indirect pressure by refusing to handle goods for or provide services to a third party. They are prohibited by the Taft-Hartley Act, enacted in 1947 after a wave of post-World War II labor unrest.
Engaging in a secondary boycott targeting third parties such as trans-Pacific shippers would raise the prospect of court action in addition to being in violation of the PMA-ILWU contract, which runs through June 2014.
That contract is enforceable under arbitration procedures, which the PMA hasn’t hesitated to use in recent years. Although the ILWU occasionally tests employers by stopping work at specific ports or marine terminals, the job actions are usually short-lived and quickly squelched under the contract’s arbitration procedures.
For example, the ILWU’s Office Clerical Unit has posted picket lines at marine terminals twice over the past 18 months during its drawn-out contract talks with Southern California maritime employers. When ILWU dockworkers refused to cross the lines, the PMA called in a neutral arbitrator who determined the longshoremen’s support of the office workers constituted an illegal secondary boycott. The dockworkers were back on the job the same afternoon.
Any similar attempts to halt work at West Coast ports in connection with the ILA negotiations would undoubtedly elicit a similarly quick response by the PMA.
At this point, discussion of possible work stoppages is entirely theoretical. The ILA and United States Maritime Alliance, the East Coast employers group, have just started negotiations for an East and Gulf Coast master contract to replace the current one, which remains in effect until Sept. 30.
Although ILA President Harold Daggett raised shippers’ concerns at the TPM conference by listing automation, jurisdiction, chassis and overweight containers as potential strike issues, officials from both the ILA and USMX have expressed confidence they’ll extend their 35-year record of strike-free contracts.
James Capo, chairman and CEO of USMX, went so far as to say he’s “optimistic, maybe even confident” the two sides will reach agreement without a work stoppage. “I think I speak for both sides in saying failure to reach an agreement by Sept. 30 is really not an option,” he said.
Like the ILWU contract on the West Coast, the ILA’s master contract and supplementary local agreements contain no-strike clauses that employers haven’t been shy about enforcing on the rare occasions they have come into play.
In September 2010, ILA members halted work at the Port of New York and New Jersey for two days, refusing to cross picket lines posted by Philadelphia ILA members upset over the shift of fruit imports to a non-ILA terminal.
The New York Shipping Association quickly won an arbitrator’s decision that the work stoppage was unauthorized and secured a judge’s back-to-work injunction. The ILA balked but returned to work after NYSA lawyers moved for a contempt-of-court order.
The NYSA followed up with a $5 million damage lawsuit accusing the ILA and several of its local unions of engaging in a secondary boycott. The lawsuit was dismissed in March when the parties agreed to submit the case to binding arbitration.
In addition to prohibiting secondary boycotts, the Taft-Hartley Act empowers the president to require striking workers to return to work for up to 80 days while labor negotiations continue if the labor dispute creates a national emergency.
President George W. Bush invoked Taft-Hartley a decade ago in forcing an end to a 10-day lockout of ILWU members following work slowdowns during West Coast contract negotiations. In that case, however, the damage to supply chains — and the economic impact — was done. It was months before cargo backlogs cleared on the coast, and the U.S. economy suffered an estimated $1 billion in damage.
Much quicker action would be likely in the event of an ILA work stoppage, which could come at the height of the peak shipping season when the last of the 2012 holiday shipments would be making their way to U.S. store shelves. Although President Obama undoubtedly would face labor pressure to avoid invoking Taft-Hartley to end an ILA strike, this year’s presidential election would likely trump those concerns. The president likely would move quickly to avoid economic upheaval just a month before the Nov. 6 vote.
The 2002 ILWU lockout caused many shippers to diversify their routings and ship more cargo through East and Gulf Coast ports. The shift generated additional employment for ILA members who welcomed the additional work.
The PMA’s McKenna said he would anticipate a similar response from the ILWU this year if the tables were turned. “The ILWU are union guys,” he said, “but first and foremost, they’re their own union guys.”
ILWU rank-and-file workers are hungry for more man-hours, which declined 25.4 percent during the depths of the recession — falling from 24.3 million in 2006 to 18.1 million three years later. Man-hours in 2011 were still 13 percent below the peak year of 2006. If container volumes spike, most ILWU members would gladly put in the extra hours needed to move the cargo.
Some shippers indicate they plan to accelerate shipments to hedge against possible East Coast labor disruptions later this year. This could contribute to an earlier-than-usual peak season for holiday imports, help support carrier efforts to raise rates this spring, and lead to potential peak-season surcharges by summer.
Ocean carriers also expect some East Coast-based shippers to divert a portion of their cargo to the West Coast early this summer to test new routings in the event they become necessary. If ILA contract negotiations become especially heated, the diversion would increase, helping to sop up excess capacity in the trans-Pacific and, again, underpin rates. How much of those containers otherwise would have been shipped all-water to the East Coast would be impossible to determine, however.
While shippers plan, the ILWU continues to express unwavering — but general — support for the ILA’s negotiating goals. “The ILWU has a long history of solidarity,” McEllrath said. “We take the words in our slogan very seriously: ‘An injury to one is an injury to all.’ ”