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ILA, USMX schedule more negotiations for later this month

By Jeff Berman, Group News Editor
August 06, 2012

On the heels of some positive momentum coming from mid-July negotiations for a new labor contract, the International Longshoremen’s Association (ILA), the largest union of maritime workers in North America, and the United States Maritime Alliance (USMX), an alliance of container carriers, direct employers, and port associations serving United States-based East and Gulf Coasts, said they will resume negotiations on Wednesday, August 22.

On August 22, the ILA said its union’s negotiating sub-committee, known as the 20-member committee, meets with the employer’s smaller negotiating committee in Delray Beach, Florida. And it added that the ILA and USMX have scheduled three days of meetings with this committee on August 22-24 and will likely call full Wage Scale meetings in early September. ILA ports from Maine to Texas are also currently engaged in local bargaining, according to the ILA, and in New York, the NYSA and ILA have scheduled local negotiations for August 28 and 29, 2012 in Newark, NJ.

Last month, the ILA and USMX announced agreements in principle on issues having to do with the introduction of new technology and automation and maintenance and repair of chassis within marine terminals and at off-pier facilities at the East and Gulf Coast ports.

“We had a productive session in Florida,” ILA president Harold J. Daggett and USMX chairman and CEO James A. Capo said in a joint statement. “We’re pleased that we were able to resolve some important issues and look forward to continuing bargaining to reach agreement on the remaining issues in the current negotiations. The East and Gulf Coasts ports are crucial to the health of the nation’s economy and we take seriously our responsibility to reach an agreement without any disruption in the supply chain and operation of the 14 ports.”

As recently reported by LM, in recent months, the talks have ranged from amicable to contentious, which has led to shippers thinking about making contingency plans to move freight that typically arrives through East and Gulf Coast ports.

Both the National Retail Federation (NRF) and the Retail Industry Leaders Association (RILA) have expressed their concerns to the ILA and USMX over what a potential labor strike could do.

A major sticking point in the negotiations between the ILA and USMX has to do with how the ILA has to negotiate all Master Contract issues with the ILA Wage Scale Committee, which the ILA’s Daggett said in a letter to USMX’ Capo is a democratically-elected committee that Capo has declined to address despite Daggett’s overtures to do so.

Another issue has to do with technology. USMX’ Capo maintains that the ILA is demanding that management guarantee a job for any worker even if new technologies eliminate a need for that position. Capo also noted that the current Collective Bargaining Agreement mandates that both sides negotiate over the impact new technology might have on the work force.

And Capo also explained that the possibility of chassis pool operators joining USMX and be bound to the Master Contract, as per the ILA’s request, would be “impossible” to achieve as the USMX cannot legally force pool operations to do so.

The ILA is also requesting that all import containers be weighed at the pier before being released to assure that ILA funds are not shortchanged monies and help to save lives as the ILA has lost 14 members in the last year due to workplace fatalities. While the ILA admitted this would reduce port productivity it stressed that productivity can never trump safety. USMX contends that weighing containers would create more unneeded work, add unnecessary expense and increase congestion at the ports.

A noted ocean cargo expert said how significant an impact a potential disruption will be depends on its duration but may not be as dire as it could be.

“There are also limits to contingency plans and mitigation,” said Paul Bingham, economics practice leader at CDM Smith. “At some point the cost of obtaining alternative transportation (i.e. West Coast or air freight) or stocking inventories outweighs the profits lost from just waiting out a disruption. Profits lost come from lost sales and depreciated product value (e.g. perishables.) Yet one needs to be careful to not over-value disruption impacts. The ships that are delayed in the case of a disruption aren’t sunk, they are diverted or delayed at sea, with most of those cargoes eventually getting to their intended recipients. There is also the working off of pent up demand after a port disruption where some of the intially-disrupted sales are made up, just with a lag.”

Bingham said that the costs of assuring import capacity on alternative routes, such as across the West Coast ports, or advance stocking of inventory can be thought of as disruption insurance premiums.

About the Author

Jeff Berman headshot
Jeff Berman
Group News Editor

Jeff Berman is Group News Editor for Logistics Management, Modern Materials Handling, and Supply Chain Management Review. Jeff works and lives in Cape Elizabeth, Maine, where he covers all aspects of the supply chain, logistics, freight transportation, and materials handling sectors on a daily basis. .(JavaScript must be enabled to view this email address).


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