NITL calls on DOT Secretary LaHood to intervene in ILA-USMX labor dispute

Given the impasse in negotiations over a labor contract between 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 ports, it likely does not come as a big surprise to see that the National Industrial Transportation League (NITL) is calling on United States Department of Transportation Secretary Ray LaHood to get the ILA and USMX back to the bargaining table to hammer out a deal.

The days are going by quickly, and the September 30 deadline for a new labor deal is getting closer. That is a point that was stressed in a letter to LaHood by NITL President and CEO Bruce Carlton.

In his letter Carlton explained that NITL members—many of whom are responsible for making freight transportation decisions using all modes in both the U.S. and globally and are importers and exporters that rely on these ports—would be adversely impacted by any shutdown of the nation’s ports.

At this point the contentious labor squabble is far more than just talk. Case in point: ILA Local 1804-1 out of North Bergen, N.J. said this week that it gave its president, Dennis A. Daggett, the authority to recommend and call for a strike if that action becomes necessary when the current Master Contract expires on September 30, according to various reports.

Carlton wrote that with “the current contract set to expire on October 1, 2012…the League is extremely concerned about the dire consequences that would impact the nation’s freight system and our economy as a result of a bi-coastal port shutdown. We need to look no further than the devastating consequences of the west coast port lockout in 2002.”

This sentiment was echoed by National Retail Federation Vice President for Supply Chain and Customs Policy Jon Gold in a recent interview, when he said that he is hopeful ILA and USMX will resume negotiations by the September 30 deadline or soon thereafter.

“From our perspective, having a strike or shutdown would not do anybody any good from a port, shipper, importer or exporter perspective,” he said. “Shippers are making their final decisions in the next week to ten days regarding their Peak Season shipping plans and unfortunately all of these decisions come with an increase in costs. The West Coast shutdown costs the U.S. economy about $1 billion per day for ten days, and it took six months to recover from it.”

This situation has shippers contemplating contingency plans should a strike occur, with time to get these plans in place for Peak Season running out.
Carlton explained to LaHood in the letter that League members have put costly contingency plans in place “to ameliorate the impacts of a potential work stoppage,” adding that “[a]ny backup of freight and equipment in the affected ports will have a domino effect on domestic transportation systems resulting in costly delays, supply disruptions and scheduling hardships on customers.”

What’s more, he said that with talks at a standstill and calls for authorizing strike actions there is truly an increased risk of a major port disruption, which would leave manufacturers, farmers, retailers, and others with uncertainty and increased costs. The impact of a strike could hinder logistics operations in myriad other ways, too, including inventory management issues and just-in-time supply chain matters.

As reported in LM, on August 22, negotiations between ILA and USMX dissolved, following July meetings, which ostensibly pointed to positive progress being made, when they 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.

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 ILA President Harold Daggett said in a letter to USMX Chairman and CEO James 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.

Carlton concluded his letter to LaHood by saying “it is best for the two sides to reach an amicable accord, [but] this cannot occur without the two sides resuming talks. We respectfully request your help in strongly encouraging the two sides to get back to the bargaining table. Only as a last resort should other measures be considered to head off a work port stoppage. It is our first hope and desire that with your encouragement labor and management will recognize the need to find common ground.”