This month’s tentative agreement on an International Longshoremen’s Association contract for East and Gulf Coast ports generated relief but no celebration. The celebration will have to wait.
That’s because the six-year deal came with an asterisk: It’s contingent on the completion of supplemental local contracts, including the contentious one covering the Port of New York and New Jersey, and on ratification by the ILA and employers.
Negotiators have set a March 1 target to wrap up the local agreements covering work rules and other port-specific issues not addressed in the Maine-to-Texas master contract. Port operations will continue during bargaining on local contracts.
What happens if negotiators can’t settle local contracts by the March 1 target date? That’s unclear. Participants aren’t discussing what-ifs. Instead, everyone appears to be operating on the premise that they’ll work out remaining contracts on schedule.
Assuming that happens, the master contract appears odds-on for ratification. ILA President Harold Daggett assured union members they’d be happy with the terms. Despite some complaints centered on financing of local pension plans, there is no sign of organized rank-and-file opposition. The ILA’s 200-member Wage Scale Committee will meet March 12-14 in Tampa, Fla., to review the agreement before submitting it for a membership vote.
The tentative master contract would raise the $32 hourly base pay for experienced ILA members to $35 in three steps. New hires will be able to advance from the $20 entry-level scale to the top level in six years instead of the current nine. In some ports, much work is done at overtime rates.
A compromise on container royalties guarantees that carriers’ annual tonnage-based payments will be at least the
$211 million they paid in 2011, and says the ILA and USMX will split any excess revenue. USMX had sought to cap and phase out the program over 25 years. The ILA opposed any caps on royalties, which since the 1960s have provide annual cash payouts to members.
The contract also includes previously reported provisions to protect workers displaced by automation, and to tighten ILA jurisdiction over chassis repairs and other work. USMX did not seek cuts in ILA medical benefits, which will remain free for eligible members.
Even before hearing contract details, cargo interests were relieved by news of the tentative master contract agreement. They’ve been anxiously adjusting and implementing contingency plans since Daggett warned the JOC’s TPM Conference last March that a strike was possible if the union couldn’t secure satisfactory terms.
Organizations including the National Retail Federation, the Retail Industry Leaders Association, and the Apparel and Footwear Importers Association have urged the Obama administration to invoke the Taft-Hartley Act to seek a back-to-work injunction if necessary to keep ports open.
Shippers’ concerns spiked as on-and-off strike threats pushed East and Gulf Coast container ports to the brink of a shutdown three times in the last six months. The contract between the ILA and USMX originally was set to expire on Sept. 30. Negotiations broke down in August before a federal mediator got involved and helped the parties work out a 90-day extension to Dec. 29, followed by a shorter one through Feb. 6.
Neither the ILA nor employers wanted a third extension. When three days of often-strained negotiations in late January produced progress, negotiators extended their talks another day. The Federal Mediation and Conciliation Service announced the tentative master contract agreement late on Feb. 1, the Friday night before the Super Bowl.
The coastwide deal was a big step, but ILA contracts are negotiated at two levels. The coastwide master contract between the ILA and USMX, the employers’ umbrella organization, covers wages for container and roll-on, roll-off cargo. The master contract also defines the basic workday and covers carriers’ per-ton container royalty payments, jurisdiction, automation and medical benefits. Work rules, pensions and other port-specific issues are negotiated in supplemental local agreements with USMX member organizations including the New York Shipping Association.
Following the coastwide agreement, Daggett pledged “full attention” to negotiation of local contracts. By early February, local contracts were at or near completion in several East and Gulf Coast ports. The notable exception was New York-New Jersey, home to nearly one-fourth of the 14,500 ILA workers under the coastwide contract.
The first round of New York-New Jersey negotiations after the master contract agreement were inconclusive. NYSA President Joseph Curto said “a number of complex issues” were being addressed. “The good news is that bargaining is continuing and the day-to-day work in the port’s facilities will go on without disruption,” he said.
The East Coast’s largest port has been the center of attention in the master contract talks since they opened 11 months ago, except for a few weeks in December when attention focused on a dispute over container royalties.
Employers’ efforts to use the master contract to provide more flexibility to negotiate changes to local work rules were aimed primarily at New York-New Jersey. Daggett objected vehemently to changes he said would cut workers’ pay. His refusal to discuss changes precipitated the breakdown in negotiations last August.
New York-New Jersey’s labor costs are far higher than those of other U.S. ports. That’s partly because ILA jurisdiction is more extensive than in other ports, and partly because of the port’s unique work rules. While other ports schedule labor in shifts, work gangs in New York-New Jersey stay on the job until work is completed on a ship.
This “continuous operation” system results in high levels of relief staffing. The ILA-NYSA local contract requires employers to hire 15 or 16 workers per gang, depending on whether straddle carriers are used, when only nine or 10 are working at a time. All are paid even if they leave the terminal for a “blow,” or work break. The NYSA has proposed replacing this with regular shifts.
Many of the New York-New Jersey work rules predate the port’s shift from breakbulk to containerized cargo. Employers said they didn’t expect to change all of the practices at once, but they wanted to address some of the practices that raise costs and lower productivity. Daggett said the changes went too far, too fast.
Employers said they needed the changes to help New York-New Jersey compete for inland intermodal cargo that the port is trying to attract, and to efficiently handle the larger ships the port is expected to attract after the 2015 expansion of the Panama Canal and the raising of the Bayonne Bridge in the port.