Now that a West Coast longshore labor contract extension is in place through mid-2022, shippers are anxious for a similar deal to ensure continued labor peace on the East and Gulf coasts. Recent developments suggest it could happen soon.
International Longshoremen’s Association President Harold Daggett said he plans to convene the union’s wage-scale committee “in the near future” to meet with with US Maritime Alliance to discuss a possible extension of the ILA-USMX contract, which expires Sept. 30, 2018.
Daggett did not elaborate, but other sources within the ILA and among employers said the goal is to have an agreement in place before JOC’s Trans-Pacific Maritime conference next March 4 to 7 in Long Beach, California.
If an early deal can be achieved, it would reassure shippers who in recent years have been whipsawed by actual or threatened labor disruptions on both coasts. The ILA came close to a strike in 2012 to 2013, and West Coast ports were gridlocked for months in 2014 to 2015 by port slowdowns during bitter negotiations between the International Longshore and Warehouse Union and the Pacific Maritime Association.
Last summer’s contract extension by the ILWU and the PMA increased pressure for an agreement on the East and Gulf coasts. The West Coast extension was for three years past the previous agreement’s mid-2019 expiration.
East and Gulf coast ports have increased their share of Asian imports to 34.3 percent in the first half of this year from 21.6 percent in 2005, according to PIERS, a sister product of JOC.com within IHS Markit. They worry that labor uncertainty could cause some of that increased share to flip back to the West Coast.
The stakes of the East vs. West competition have been raised by the mid-2016 opening of the Panama Canal’s new locks, and by last summer’s raising of the roadway of New York-New Jersey’s Bayonne Bridge to accommodate larger ships. Together, these developments have opened the way for larger ships to call multiple East Coast ports, which now have regular calls by vessels with capacities of up to 14,000 TEU.
Jonathan Gold, vice president of the National Retail Federation, said importers were heartened by the West Coast extension and hope the ILA and USMX can reach agreement soon. “The closer we get to the expiration without an agreement, the more antsy everyone becomes,” he said. “If we get to next summer and there’s still no agreement, people will start looking at other routing options.”
ILA and USMX officials have been discussing an extension or early agreement on a new contract for more than two years. At one time, the parties kicked around the idea of an extension to 2025, but those discussions lost momentum amid concerns about healthcare costs and other issues.
When the ILWU and PMA began discussing a contract extension, the ILA and USMX decided wait and see what happened on the West Coast. With the West Coast extension in place, the pace of activity is expected to quicken during the next few weeks.
The ILA and USMX have not scheduled negotiations or exchanged formal proposals, and it is not clear yet how wide-ranging the contract discussions will be. The ILWU-PMA extension focused on wages and benefits and avoided more-contentious issues such as automation and work jurisdiction.
Daggett said last winter that he expected automation to be the top issue in the next negotiations, and that the ILA opposed fully automated terminals but could accept semi-automated terminals as long as union members were trained and hired to staff them.
Otherwise, he has been fairly circumspect — a contrast to the run-up to the acrimonious 2012 to 2013 negotiations. Those talks dragged on for a year, were highlighted by repeated strike threats and two short-term contract extensions, and required a federal mediator’s assistance to reach agreement.
Last February, the ILA and USMX held informal meetings that served mainly as a forum for local union officials to sound off with their ideas and opinions for the next contract. Issues raised included the ILA’s longstanding displeasure with the Waterfront Commission of New York Harbor, and with South Atlantic ports that hire non-union state employees for certain jobs at state-owned terminals.
Some ILA officials used the meetings to propose a one-day work stoppage and Washington march to protest “government interference” by the Waterfront Commission and by the South Atlantic ports. The work stoppage was called off after USMX warned it would violate the contract’s no-strike clause.
Other issues raised during the informal meetings included jurisdiction over chassis maintenance and repair, and proposals to use the coastwide master contract to provide a revenue stream to shore up some ports' underfunded pensions, which are covered by supplemental local contracts.
ILA contract negotiations are conducted at two levels. The coastwide master contract sets wages for container and roll-on, roll-off cargo handling, defines the scope of work, and includes medical benefits, carrier-paid container royalties, and other coastwide issues. Local contracts cover pensions, work rules, and other port-specific issues. Wages for breakbulk and bulk cargo handling are also are negotiated locally.
Traditionally, the master contract has been negotiated before completion of local negotiations. Following a Baltimore arbitrator’s 2013 ruling that local disputes can’t nullify the master contract’s no-strike clause, Daggett directed union officials to try to settle local contracts first.
Local negotiations have begun at most ports. An exception is the Port of New York and New Jersey, whose local issues historically have overlapped negotiation of the master contract.
New York-New Jersey local issues dominated the 2012 to 2013 master contract negotiations. Container lines in USMX refused to sign off on the coastwide contract until they had secured productivity-enhancing measures in the local contract covering the East Coast’s busiest port.
Amid friction with the Waterfront Commission over industry hiring practices, some of these productivity measures still have not been implemented, and could be carried over into a new or extended local contract.
ILA displeasure with the Waterfront Commission cited as the reason for a one-day wildcat strike that idled the Port of New York and New Jersey on Jan. 29, 2016. A federal court recently ruled that Daggett and several other top ILA officials had to answer the commission’s questions about the cause of the strike.