Federal mediation of International Longshoremen’s Association contract talks has revived hope for a settlement or temporary extension to avert a threatened East and Gulf Coast port shutdown at the end of this month.
The ILA and United States Maritime Alliance agreed to resume bargaining this week under supervision of the Federal Mediation and Conciliation Service. The FMCS had kept abreast of the negotiations for several weeks before talks broke down on Aug. 22. The agency said renewed negotiations would be kept out of the limelight.
“Due to the sensitivity of this high-profile dispute and consistent with the agency’s long-standing practice, we will not disclose either the location of the meeting or the content of the substantive negotiations that will take place,” FMCS Director George H. Cohen said in a brief statement.
Cargo interests are watching anxiously. Last month’s collapse in negotiations set off a scramble for already-tight space on ships to the West Coast. Many shippers have padded inventories by booking cargo early. Others are sticking to regular routings, either because their cargo can’t absorb added costs or because they’re betting a work stoppage will be avoided or short-lived.
Some shippers already are suggesting the Obama administration halt any port shutdown with a back-to-work injunction and 80-day cooling-off period under the Taft-Hartley Act. The law was last used in 2002 to end a lockout of the International Longshore and Warehouse Union at West Coast ports.
An ILA port shutdown of even a few days would disrupt cargo flows through the rest of this year’s holiday peak season. The 2002 West Coast lockout totaled only 11 days but created backlogs that took months to clear. Several carriers plan to impose congestion surcharges of $1,000 or more per container if the ILA strikes or is locked out.
Shippers’ concerns aren’t limited to a strike, which ILA President Harold Daggett said appeared likely after negotiations collapsed. Shippers also are worried about slowdowns such as those that triggered the 2002 West Coast lockout.
If the mediator can get the ILA-USMX negotiations back into gear, the parties could continue bargaining past Sept. 30. However, there’s little sentiment, at least from management, for a lengthy extension.
Any port shutdown likely would affect all container and roll-on, roll-off cargo under the ILA-USMX master contract, which covers all major ship lines and ports from Maine to Texas. The master contract defines the basic 8-to-5, Monday-Friday workweek, and includes the union’s coastwide medical plan, and carrier-paid container royalties that support bonuses and benefits.
Breakbulk cargo is covered under supplementary local contracts that also include work rules, pensions and other port-specific issues. Local breakbulk negotiations have continued since the collapse of master contract talks. During its last coastwide walkout in 1977, the ILA targeted containers and ro-ro but continued to handle breakbulk and bulk shipments.
Master contract negotiations were halted after Daggett refused to discuss management proposals for changes in work rules and practices that inflate overtime pay and raise costs, especially in the Port of New York and New Jersey. USMX agreed in principle in July to two of the union’s top demands — a framework for paying workers displaced by automation, and protection of ILA jurisdiction over chassis maintenance and repair.
Shipper concerns were fanned when ILA Local 1804-1, headed for years by Daggett and now headed by his son Dennis, voted to authorize a strike when the contract expires. Fewer than half of the New Jersey-based local’s 1,100 members, however, are covered by the union’s contract with the New York Shipping Association. Most work under the ILA’s contract with the Metropolitan Marine Maintenance Contractors Association, which isn’t part of the current talks.
NYSA members employ about 3,300 of the 14,500 ILA members covered by the coastwide master contract. Employers have said for more than two years they hoped to use this year’s contract negotiations to control costs in New York-New Jersey, which USMX Chairman and CEO James Capo has described as “the most expensive port in the world.”
New York-New Jersey staffing rules require 15 or 16 workers per gang to be hired when only nine or 10 are working at a time. Those gang sizes include two relief crane operators for each one who is working. USMX says one-third of the port’s dockworkers are paid more than $208,000 a year in wages and benefits, in addition to annual bonuses based on container tonnage.
A handful of the port’s dockworkers, mostly head timekeepers, shop stewards or head clerks, have attracted attention for receiving round-the-clock pay of more than $400,000 a year even though they’re on the job only a few hours a day. Because of staffing requirements and overtime-pay rules, more than half of the port’s ILA work force receives annual pay and royalty bonuses of more than $100,000 a year plus benefits.
Daggett has defended ILA pay levels and accused employers of providing “misleading information” in an effort to inflame public opinion against the union. “They have adopted an ugly strategy that will not succeed,” he said.