Negotiations on a new International Longshoremen’s Association contract for East and Gulf Coast dockworkers have taken a negative turn, confronting shippers with tough choices in the weeks ahead.
Strains between ILA President Harold Daggett and United States Maritime Alliance broke into public view with a series of testy exchanges via statements posted on the Web sites of the ILA (ilaunion.org) and USMX (usmxlaborupdates.com).
Daggett started the back-and-forth with a May 25 letter to ILA locals. He said he’d hoped to resume negotiations after the ILA and USMX exchanged initial proposals in late March, but management was “unwilling to agree to the ILA’s main demand for job protection for the members affected by automated terminals.”
The ILA president advised union officers to “inform their memberships that they should prepare themselves for any action we may have to take if USMX’s position does not change.”
USMX Chairman and CEO James Capo responded that Daggett refused to negotiate unless management granted the ILA’s demands in advance. “That’s hardly good faith bargaining, in which the process gives both sides an opportunity to voice their concerns and present their proposals,” Capo said. He urged Daggett “not to impose any preconditions on negotiations before coming to the bargaining table.”
Capo said USMX was ready to negotiate, but that Daggett “appears to be less-than-committed to engaging in meaningful bargaining that for decades has characterized our negotiations and successfully resulted in several new contracts.” The ILA hasn’t had a coastwide strike since 1977.
The negotiators’ caustic tone differed markedly from their joint statement on March 30, when Capo and Daggett opened negotiations and expressed confidence they could reach an agreement well in advance of the current contract’s Sept. 30 expiration.
That statement was designed to calm shippers unnerved by Daggett’s bellicose statements at The Journal of Commerce’s TPM container shipping conference in early March. The ILA president told the TPM audience that technology, union jurisdiction, chassis and overweight containers were potential strike issues.
After exchanging initial proposals in March, the ILA and USMX appointed joint subcommittees to discuss contract issues. Daggett urged USMX to resume negotiations when the ILA’s 200-member wage scale committee meets on June 27 in Delray Beach, Fla.
Cargo interests are watching developments with one eye on the calendar. Many large shippers, including major importers, have said that if the negotiations don’t show progress by early summer, they plan to divert some of their peak-season cargo to West Coast ports, where the International Longshore and Warehouse Union has a no-strike contract through 2014.
That strategy, however, is not risk-free. The ILWU’s Office Clerical Unit has been without a contract since 2010, and an arbitrator recently ruled that ILWU dockworkers may refuse to cross OCU picket lines. The ruling has not been tested, but it poses the potential for disruptions at West Coast ports.
Since his election as ILA president last summer, Daggett has pledged a more aggressive stance that contrasts with the collaborative approach of his predecessors John Bowers and Richard Hughes. Daggett has frequently criticized labor-saving technology and said his goal is “to protect the ILA’s members and their families from the impact of new technology.”
In the current negotiations, Daggett is demanding that management guarantee jobs for any workers whose jobs are automated. USMX’s position is that ports must employ up-to-date technology to achieve the productivity that East and Gulf Coast ports need to compete for cargo and generate ILA jobs. “Growth is the best guarantee of jobs,” Capo has said.
In a memo to USMX members, posted on the group’s Web site, Capo said several of Daggett’s contract demands “would reduce productivity, increase congestion, and add unnecessary costs at the East and Gulf Coast ports.”
Capo cited Daggett’s demands for job guarantees in exchange for automation and said the ILA president “apparently fails to recognize … that the current collective bargaining agreement mandates that both sides negotiate over the impact new technology may have on the work force.”
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“Jim, I do not need for you to tell me what is in the master contract,” Daggett replied in a letter posted on the ILA’s Web site. Daggett said USMX’s goal “seems to be productivity for the shippers and unemployment for the ILA.”
Daggett said the contract’s technology provision “needs to be strengthened, especially if USMX wants the ILA to agree to a multiyear agreement.” USMX has suggested a six-year contract, which ILA officials said they viewed favorably.
“My concern is that USMX wants to effectively eliminate the work force through automation,” Daggett said in his letter to Capo. “If that happens, the wage and benefit package will not matter, since there will be very few ILA members working in our new automated terminals.”
Wages and benefits are a secondary issue in this year’s negotiations. A 2009 contract extension sharply increased most ILA workers’ hourly pay, which ranges from $20 to $32 for straight-time container work. The extension also ended caps on carriers’ tonnage-based container royalty payments, a change that has provided more than $75 million a year in additional funds for ILA bonuses and benefits.
USMX said ILA workers average $124,138 a year in wages and benefits. “And they pay no premiums and minimal co-pays and deductibles for a health care plan that is better than most U.S. employers provide their workers,” Capo said.
Besides ILA demands on technology and jurisdiction, the ILA and USMX disagree over union demands that chassis pool operators be included in the coastwide contract and that import containers be weighed by ILA workers at marine terminals.
Before he became ILA president, Daggett headed the 1,500-member New Jersey local that maintains and repairs intermodal equipment. He has criticized ocean carriers’ transfer of chassis to third-party pools that, he said, have no contractual obligation to continue to employ ILA labor.
Capo said USMX cannot legally force pool operators to join the management group, and noted that the pools have pledged to continue to hire ILA members to maintain and repair chassis and to respect ILA jurisdiction where it exists. “We have no reason to believe they will not continue to honor that agreement,” he said.
The ILA wants on-dock weighing of import containers to improve safety and ensure that carriers don’t shortchange the union on tonnage-based container royalties. Capo said weighing containers at the pier “would create more unneeded work, add unnecessary expense, and increase congestion at the piers.”
“That may be true,” Daggett said in his reply, “but it would also assure that the ILA funds are not shortchanged monies and help save lives on the highways … Productivity can never trump the safety of my members and the protection of their employee benefit funds.”
Negotiation of the coastwide master contract is the first step in a two-level system of bargaining at East and Gulf Coast ports. The master contract covers wages, benefit contributions and other issues for container and roll-on, roll-off cargo. Supplemental local or regional agreements cover work rules, pensions and other port-specific issues.
Local negotiations in the Port of New York and New Jersey are expected to be especially contentious. The New York Shipping Association plans to press for changes to long-established work rules that require excess manning and drive up costs. Approximately 40 percent of ILA man-hours in the port are for hours when no work is performed.
The ILA is expected to resist many of the changes. New York-New Jersey port users got a hint of possible things to come when Daggett ordered “by-the-book” safety inspections of chassis and containers before the Memorial Day weekend. He denied that the union engaged in an intentional slowdown, but to port users that was a distinction without a difference – shipments were delayed as trucks waited several hours in lines stretching nearly a mile.