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Industry Seeks Longterm Deal on Ports

ILA and USMX extend negotiations 30 days to reach contract agreement.

NEW YORK — While the fashion industry breathed a sigh of relief on Friday that dockworkers strike on the Eastern Seaboard had been averted and the likelihood of a long-term contract agreement was in the works, it remained concerned that a final deal had not been reached.

The International Longshoremen’s Association and the U.S. Maritime Alliance agreed to a 30-day extension of their labor negotiations on Friday, averting a potential work stoppage at East and Gulf Coast ports this week, and have reached a tentative agreement on the thorny issue of container royalty fees — payments to union workers based on cargo weight that have been in practice since the Sixties when containerization and automation took hold — that put the talks at an impasse last month.

 

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Matthew Shay, president and chief executive officer of the National Retail Federation, said while news of a contract extension was welcome, “we continue to urge both parties to remain at the negotiating table until a long-term contract agreement is finalized.

“While a contract extension does not provide the level of certainty that retailers and other industries were looking for, it is a much better result than an East and Gulf Coast port strike that would have shut down 14 container ports from Maine to Texas,” Shay said. “A coast-wide port shutdown is not an option. It would have severe economic ramifications for the local, national and even global economies and wreak havoc on the supply chain. Throughout the process, NRF has stressed the vital economic importance of keeping the ports open to international trade and commerce.”

 

Kelly Kolb, vice president for government affairs at the Retail Industry Leaders Association, said, “Retailers welcome news that the ports will remain open for business through the busy spring shipping season. Retailers are, however, eager to see the parties reach a long-term agreement that will ensure stable and predictable operations at East and Gulf Coast ports. Ports play a critical role in the supply chain and a potential disruption would be harmful to the retail industry as it would lead to lost sales and aggravated customers.”

Kevin Burke, president and chief executive officer of the American Apparel & Footwear Association, said, “The clock now begins for the negotiators to return to the table and work toward a long-term solution to restore greater predictability and certainty to the business decisions the U.S. apparel and footwear industry makes every day.”

In announcing the extension of talks on Friday, George H. Cohen, director of the Federal Mediation and Conciliation Service, said, “The container royalty payment issue has been agreed upon in principle by the parties, subject to achieving an overall collective bargaining agreement. The parties have further agreed to an additional extension of 30 days (until midnight, Jan. 28) during which time the parties shall negotiate all remaining outstanding Master Agreement issues, including those relating to New York and New Jersey. The negotiation schedule shall be set by the FMCS after consultation with the parties.”

Cohen said given the ongoing negotiations and a commitment of confidentiality to the parties, FMCS would not disclose the substance of the container royalty payment agreement.

“What I can report is that the agreement on this important subject represents a major positive step toward achieving an overall collective bargaining agreement,” Cohen said. “While some significant issues remain in contention, I am cautiously optimistic that they can be resolved in the upcoming 30-day extension period.”

Cohen credited ILA president Harold Daggett and USMX chairman and chief executive officer James Capo for their “adherence to the collective bargaining process, which has enabled them to avoid the imminent deadline for a work stoppage that could have economically disruptive nationwide implications.”

The FMCS stepped in to end an eight-day strike at the Ports of Los Angeles and Long Beach last month that caused delays and disruptions to shipping, but came at a slow shipping period for apparel.