The powerful International Longshore and Warehouse Union is engaged in a fight with the Port of Portland, Ore., and international terminal operator ICTSI — over two jobs.
Those jobs involve plugging, unplugging and monitoring refrigerated containers at Portland’s Terminal 6. Members of the International Brotherhood of Electrical Workers have performed the jobs for more than 30 years under contract with the port authority.
ICTSI, however, took over operation of the terminal, and ICTSI is a member of the Pacific Maritime Association, the employers’ group that manages the coastwide contract for container lines and terminal operators.
Now the ILWU wants that work.
To outsiders, it may appear that the ILWU’s job actions, demonstrations and costly litigation are an overreaction to the outcome of jurisdiction over two jobs. Employers who have spent their careers dealing with the ILWU understand where the union is coming from. “If they let those jobs get away, what’s next?” said Ed DeNike, chief operating officer at SSA Marine, which operates marine terminals at all of the major West Coast ports. “There are even more reefer jobs in Oakland.”
On the East Coast, the equally powerful International Longshoremen’s Association tried unsuccessfully this year to prevent a Jacksonville stevedore’s use of non-ILA labor to load ammunition for the U.S. Marines in Charleston. The union picketed the Marine barracks in Washington and the Navy base in Charleston where the ammunition was loaded.
Those are two of a half-dozen longshore job actions or protests in recent years involving the dockworker unions on both coasts. In terms of economic impact, they pale in comparison to the eight-day strike in late November by the Office Clerical Unit of ILWU Local 63 in Los Angeles-Long Beach, and the contentious ILA contract negotiations on the East Coast that could result in a strike or an employer lockout after Dec. 29. But even labor actions local in nature are part of a bigger picture on the waterfront.
Similar labor actions involve an ongoing contract dispute between the ILWU and six international grain terminal operators in the Pacific Northwest that also could lead to an employer lockout. That battle follows violent protests by the ILWU last year in Longview, Wash., to prevent international grain company EGT from opening a new export terminal with non-ILWU labor.
The ILWU also is protesting an attempt by a barge company in Coos Bay, Ore., from starting operations without using ILWU labor. The ILA in 2010 went to the mat in Philadelphia with Del Monte Fresh Produce when the company shifted its Philadelphia imports to a non-ILA terminal. The union vented its anger with a two-day work stoppage in the Port Authority of New York and New Jersey.
Other labor disruptions have involved organized labor not engaged directly in cargo handling, but those incidents affected terminal operations. ILWU security guards who work for the Port of Portland threatened to shut the port down last month, but a settlement was reached at the 11th hour.
The Port of Oakland wasn’t so lucky. ILWU dockworkers in November honored a picket line by the Service Employees International Union and shut down the port.
The common thread running through all of these labor actions is a realization that technology and automation is changing the workplace union members have known throughout their careers, and some of the high-paying waterfront jobs that have traditionally been passed down from father to sons, daughters and grandchildren may no longer be available to pass on.
The longshore unions are trying to preserve a lifestyle they admit has been very good, and they want the same for younger generations. Employers say they are attempting to right-size their operations with the jobs of the future.
Not all of the job actions are a direct response to technology and automation. In some cases, the tension with employers involves the use of non-ILA or non-ILWU labor to perform work the unions believe is, or at least should be, under their jurisdiction.
In other cases, the conflicts involve terminal operators’ attempt to compete internationally by eliminating outdated and costly work practices that kill productivity.
Although each case is unique and the issues can vary, the underlying theme is that the workplace is changing dramatically, and the unions believe that if they give in to employers, even if it involves only two jobs, the outcome is an erosion of their power that eventually will doom organized labor on the waterfront.
This deep concern of labor isn’t confined to the waterfront. It’s present in a number of industries nationwide, in the public and private sectors. The latest example involves a move by the Republican governor and Legislature in Michigan in mid-December to move public sector employees into a right-to-work workplace.
“We’re seeing it across the board, in all industries,” PMA President Jim McKenna said. The last five years have seen more labor disputes, especially those involving union jurisdiction, than at any time he can remember.
Organized labor, as a whole, and longshore unions, in particular, want to keep their unions relevant. In many cases, however, the unions cause just the opposite reaction among employers by engaging in costly work stoppages and, at times, violent demonstrations.
For the longshore unions, a strike is a necessary tool in labor relations to even the playing field with employers considered to have much more in the way of financial resources than workers have. Blocking a train that was carrying grain to the EGT terminal in Longview, Wash., isn’t an everyday event, but it helped ILWU President Bob McEllrath to keep a non-ILWU union from being employed at EGT.
The longshore unions historically have achieved some of their most impressive gains not by skillful negotiating tactics, but rather through brute force. Today they face a new reality in which employers are standing together and absorbing powerful body blows, and, in the end, many employers are getting their way.
That was the case in the OCU negotiations in Los Angeles-Long Beach. Stephen Berry, lead negotiator for the 14 employers with OCU workers, emphasized that the employers remained united after the previous contract expired in June 2010. The employers took an eight-day strike, and when the dust settled, they won most of the flexibility they were seeking to allow unnecessary jobs to die through attrition.
Waterfront employers also are going to the federal courts and federal agencies when they feel it’s necessary, or will give them an advantage. This is a departure from past practices when waterfront disputes were considered family affairs to be resolved through the union-employer grievance machinery in the contract.
The ILWU-IBEW tug-of-war over two reefer jobs in Portland has been tried several times in court or before the National Labor Relations Board, and litigation is ongoing. This is costly for employers, but also for the unions, which can’t afford to continually fight legal battles on a variety of fronts.
In some cases, the powerful unions are confronting something they’ve never experienced before: a force even more powerful than they are.
The ILWU contract negotiations with six grain elevators in Oregon and Washington involve international powerhouses such as Louis Dreyfus, Cargill, Mitsui and Marubeni, companies with much deeper pockets than the container lines that have managed to lose billions of dollars in recent years. The ILWU, which has been so successful in standing up to the container lines, is finding it much harder to go toe-to-toe with the international grain companies.
The historical strength of the longshore unions on both coasts is that they have dealt with about 20 carriers that operate at all of the major ports in each region. If an employer in Portland angers the ILWU local there, the ILWU locals in Los Angeles, Long Beach, Oakland, Seattle and Tacoma could, and sometimes would, shut them down everywhere. The same scenario exists on the East and Gulf coasts.
The grain terminals in the Pacific Northwest aren’t members of the PMA. Likewise, the bulk carriers that carry grain from the terminals have a limited presence in other ports, so the leverage the ILWU has had in the container shipping industry doesn’t carry over to the bulk grain industry.
In fact, the ILWU’s leverage is so limited in the grain industry that in this instance the union members attempt to position themselves as the “good guys” up against the extremely profitable international grain companies. The ILWU has emphasized throughout its dispute that negotiations aren’t at impasse and the union is anxious to bargain. The ILWU consistently points to the possibility of an employer lockout.
Longshore unions’ ability to divide and conquer their employers has been a major source of their strength. On the West Coast, only two of the 11 voting members on the PMA board are independent terminal operators such as SSA Marine, DeNike noted. The other nine voters represent shipping lines.
More than anything else, shipping executives fear seeing their $100 million-plus vessels idled by a lengthy strike. On more than one occasion, SSA has opposed carrier negotiating offers that the terminal operators knew would result in costly work rules, ill-conceived work practices or excessive manning requirements, but the terminal operators were outvoted easily, DeNike said.
In the 1970s and 1980s, when freight rates in the booming container shipping industry resulted in large carrier profits, this arrangement worked fine. The adage then was that the union demanded, the carriers gave in and the cargo interests paid the bill. Importers then paid dearly, as much as $4,000, to ship a container from Hong Kong to Los Angeles.
Today, importers pay maybe $2,000 per 40-foot container on the same route. That means carriers can’t afford to absorb the cost of what employers call featherbedding and outdated work practices. At the same time, carriers refuse to pay the increased charges independent terminal operators say they need to cover their soaring labor costs.
The result, then, is the proverbial irresistible force meeting the immovable object. Waterfront employers, be they shipping lines, terminal operators or port authorities, say they simply can’t afford to do business as usual and remain competitive. That’s why they’re more determined than ever to stand united against certain wasteful practices, even if those issues are confined to a single port complex.
This was evident in the OCU negotiations in Southern California and is a main point of contention in the ILA contract negotiations. Employers in New York-New Jersey, the largest port complex on the East Coast, are determined to end local practices such as paying a handful of shop stewards and timekeepers for more than 24 hours of work a day, or hiring gangs of 15 or 16 longshoremen when only nine or 10 are actually working.
Those are the economic realities the ILWU and ILA face in today’s hyper-competitive maritime industry. It’s also why, on the East Coast, employers are digging in and are prepared to absorb a costly strike, if necessary, to do away with work rules and practices that are the products of a past generation. Employers 20 or 30 years ago foolishly agreed to that so-called featherbedding, and today the shipping industry is paying a dear price for those bad contracts.
The unions haven’t given up, though. On the West Coast, the ILWU’s actions are intended to send a message to employers that they should prepare for contentious contract negotiations, if need be, in 2014, said Bill Wyatt, executive director of the Port of Portland.
The rules of the game are changing, however. Pushing employers into a situation where federal mediation is needed may not help the unions. The longshore unions have contracts with wages and benefits that are much greater than most other unions can ever dream of attaining.
When the sticky issues in contract negotiations involve an attempt by employers to eliminate wasteful, noncompetitive work practices that can result in cargo moving to ports in Canada and Mexico, the unions will have a tough time pleading their case to federal mediators.
The 2 ½-year OCU negotiations in Southern California appeared to be going nowhere until the union agreed to federal mediation. While the mediators were in transit from Washington, a neutral party involved in the talks reportedly told the OCU they had the finest contract offer labor anywhere could ever hope for — with a wage and benefits package totaling $190,000 by the end of the contract period.
Sensing that the mediators would think the same way, the OCU signed the tentative contract offer before the mediators arrived in Los Angeles.