Port Talks Stall as Deadline Nears

The International Longshoremen’s Association and U.S. Maritime Alliance in contract negotiations painted different pictures of talks that are at an impasse.

WASHINGTON — The International Longshoremen’s Association and U.S. Maritime Alliance, or USMX, in contract negotiations covering workers at ports from Maine to Texas, painted different pictures Tuesday of talks that are clearly at an impasse.

This story first appeared in the December 19, 2012 issue of WWD.  Subscribe Today.

The ILA said the USMX rejected a proposal to extend talks another month until Feb. 1, while the USMX said the ILA rejected a federal mediator’s proposal to extend a short contract extension.

Under a previous extension, the two sides have until Dec. 29 to reach an agreement on a new collective bargaining pact, which is being supervised by the Federal Mediation & Conciliation Service. The ILA said it requested an extension to work out key sticking points, but it demanded that the USMX take the issue of container royalties off of the table.


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“USMX seems intent on gutting a provision of our master contract that ILA members fought and sacrificed for years to achieve,” said ILA president Harold J. Daggett. “We have repeatedly asked them to leave this item alone — it was a hard-won gain by ILA members and a wage supplement achieved through hard-fought negotiations.”

James A. Capo, president and chief executive officer of USMX, said: “USMX and its members are disappointed with the breakdown of negotiations and the inflexible stance that the union’s leaders have maintained over the nine-month course of these talks. It is especially disheartening given the history of cooperation that in the past has characterized negotiations with the ILA and, since 1977, has resulted in nine new agreements without a single strike or coast-wide work stoppage.”

In a fact sheet posted on its Web site, USMX said container royalties were established in 1960 to protect members of the ILA in New York from job losses created by containerization and the introduction of automated cargo. Since then, container royalties have increased for workers at all 14 ports, reaching $211 million in 2011 alone, according to USMX. The group, representing management or ocean carriers, said some of the money goes to the union — an estimated $21 million last year — through a checkoff from each member’s royalty payment.

USMX released a summary of its proposal it said the ILA rejected. The USMX offered a six-year agreement that would provide for two wage increases of $1 each over the term of the agreement, bringing the average hourly rate for the ILA to $55, including overtime and container royalties. The USMX said it would also maintain royalty payments at 2011 levels for current recipients for 25 years or until they leave the industry, whichever occurs first, however new employees would not be eligible for container royalty payments.

USMX also said it offered protection for workers who may be displaced as a result of the implementation of new technology and work preservation provisions covering ILA chassis maintenance and repair.

The union has threatened to go on strike if an agreement is not reached, which would affect imports of apparel, textiles and footwear headed into the new year. The East and Gulf Coast ports handle about 20 percent of the industry’s shipments. In 2011, the 14 ports handled more than 110 million tons of import and export cargo.

Jonathan Gold, vice president for supply chain and customs policy at the National Retail Federation, said, “It is extremely disheartening to learn that the two sides failed to reach an agreement during today’s negotiations. NRF urges both sides to remain at the table until a deal is reached. It is imperative that both sides verbally announce their intentions to return to the negotiations. A coast-wide port shutdown would have a significant impact across all businesses and industries that rely on the ports, particularly retail.”