In business, as in life, it’s all about leverage. And as leverage goes, the maritime- and port-related labor movement appears to be holding many of the cards.
The strategy employed by International Longshoremen’s Association President Harold Daggett — starting at the JOC’s TPM container shipping conference in March — served as a sign that this round of contract talks would be like none the East and Gulf coasts have seen in three decades. He went on the offensive and stayed there.
Daggett’s aggressiveness has run head-on into what appears to be a determination by employers in United States Maritime Alliance to take a stand on costs and practices they’ve tolerated for years.
And this month’s strike by office clerical workers that led to a shutdown of 10 marine terminals at Los Angeles-Long Beach may only empower the ILA to take ports from Maine to Texas to the brink of their own shutdown — and maybe beyond.
So when ILA delegates meeting in Delray Beach, Fla., last week authorized a strike if no agreement is reached by Dec. 29, it really came as no surprise. Some posturing was involved, but many ILA and management officials were already pessimistic about avoiding a work stoppage.
But sometimes, as the sports adage goes, the best offense is a good defense, and the employers in USMX seem to recognize this. Many carriers already are in financial straits. Shippers and other companies up and down the marine supply chain are doing everything in their power to control costs. Their backs already are to the wall, and something has to give.
Unlike in past negotiations, the employers seem much less willing to be the side that does. Relenting on the ILA’s key demands — preserving container royalties and work rules in supplementary local contracts that increase staffing costs — appears less and less an option for employers that so often relented in the past.
So why does the ILA appear to hold the cards? Timing. Its original contract was scheduled to expire at the end of September, in the midst of the peak shipping season. Leverage.
The 90-day extension gets the industry to its slow season — but not for long. The rush to beat Chinese New Year in early February will heat up quickly in January. Leverage.
Should a strike occur and President Obama invoke the Taft-Hartley Act to reopen the ports, the 80-day cooling-off period would end some time in mid-April — at the height of service contract negotiations. Leverage.
For employers, that leaves a small window from mid-February to late March when they can ride out soft winter volumes and reclaim some leverage of their own should the two sides extend the contract again.
Does 2012 mark a turning point in labor-employer relations that will lead to more disruption in 2013 and beyond? Maybe, maybe not, but shippers best be prepared for it.