If the new International Longshoremen’s Association contract works as planned, the Port of New York and New Jersey will become more productive and less costly over the next six years.
The contract sets productivity goals, establishes regular work shifts for ILA members, creates early-retirement incentives, reduces staffing requirements, and paves the way for elimination of no-show and low-show jobs.
The agreement “will allow us to begin an evolutionary progression of meaningful change that will improve the process for working ships, hiring labor, and paying key staff persons,” said Joseph Curto, president of the New York Shipping Association.
New York-New Jersey’s work rules and staffing practices are part of a local agreement that supplements the coastwide master contract between the ILA and United States Maritime Alliance, the umbrella organization for East and Gulf Coast employers.
New York-New Jersey issues were the primary obstacle to negotiating the ILA-USMX master contract. If the ILA and NYSA had failed to agree on their local agreement, a coastwide strike would have been likely.
Carriers and employers have complained for years about the port’s costs and productivity. New York-New Jersey’s population base makes it a must-call port for most services, but high costs have handicapped the port’s efforts to compete for shipments to and from inland points.
The new contract sets productivity goals: 30 moves per gang per hour, rising to 35 an hour by the contract’s expiration in 2018. An NYSA-ILA committee will review progress and determine what to do if the productivity standards aren’t met.
ILA President Harold Daggett, who signed off on the deal, said he’s confident the productivity goals can be met.
The most far-reaching change in the New York-New Jersey contract may be replacement of the port’s unique “continuous operation” system with work shifts similar to those at other U.S. ports. Instead of staying on the clock 24 hours or more and being paid for hours-long breaks, work gangs will be hired for shifts limited to 16 hours. To help offset the impact on worker pay, the contract provides a $3-an-hour local pay differential.
Besides raising costs, New York-New Jersey’s existing work practices have been criticized as unsafe. During their paid breaks on extended shifts, workers often leave terminals or take naps in their cars before returning to operate heavy machinery. Switching to regular shifts “takes some of the fatigue factor out. It’s a more sensible way to work,” Curto said.
The NYSA began laying groundwork for changes in the port’s work practices about three years ago. Many of those practices predate the advent of containerization more than a half century ago. “We know that we can’t undo 50 or 60 years of history overnight, but we believe this agreement allows us to start the process,” Curto said. “We believe that the continuous operation system has prevented us from achieving the productivity we need to achieve.”
The new contract contains several provisions to control costs. Experienced workers will have a 60-day window to apply for enhanced pension benefits and a $150,000 severance inducement. Curto said about 400 workers with 25 years’ seniority would be eligible.
The NYSA and ILA plan a new recruiting, hiring and training program to replace those workers taking early retirement. The new work system is expected to be phased in beginning Oct. 1, 2014.
Other changes include random drug and alcohol testing, although the union insisted that its work force not be subject to additional testing by the Waterfront Commission of New York Harbor.
Waterfront Commission hearings in 2010 highlighted $400,000-plus annual pay for a handful of ILA shop stewards and timekeepers under entrenched “customs and practices” that the commission said encourages no-show and low-show jobs. Under the new contract, pay for these jobs would be restructured when current workers retire or resign. Current jobholders would keep their existing pay but would be required to be present at terminals at least 40 hours a week.
Many of the new contract’s provisions will depend on employers’ diligence in managing the agreement during its six-year term. Employers say they are committed to changes needed to make the port more competitive.
Curto said reduced costs and improved productivity under the new contract are expected to allow the port to shave $6 from its $100-per-container assessment for full containers moving within 260 miles of the port.
NYSA Executive Vice President John Nardi, who will succeed Curto as president later this year, said the new contract would help the port compete for intermodal cargo beyond the New York-New Jersey metropolitan area. “We’ve been operating on a port-to-port system, but cargo moves under a point-to-point system,” he said. “If we can’t think point-to-point, we can’t be competitive.”