WASHINGTON — The United States Maritime Alliance, or USMX, and the International Longshoremen’s Association resumed talks Wednesday in an effort to reach a contract deal and prevent an end-of-year port strike stretching from Maine to Texas.
This story first appeared in the December 27, 2012 issue of WWD. Subscribe Today.
George Cohen, director of the Federal Mediation & Conciliation Service, said Monday that both sides had agreed to return to the bargaining table at his urging following the breakdown of talks on Dec. 18 over the issue of container royalties, a supplemental, per-unit fee that has been in ILA contracts since the Sixties as a balance to automation. The ILA noted last week that USMX wants to place a cap on the amount of money that is paid to ILA members through various container royalty funds annually. Container Royalty is collected by the amount of tons of containerized cargo ILA members handle. A total of $4.85 is collected on each ton of containerized cargo handled and is distributed to ILA workers as part of a wage supplement and to the ILA members’ health-care fund.
Following the breakdown of talks, the ILA issued strike preparations for a Dec. 29 work stoppage.
On Dec. 10, ILA Wage Scale delegates rejected the USMX proposal for a Master Contract and voted to authorize a strike when the current extension expires. When the talks broke down last week, the USMX, representing ocean carriers and port operators, released an analysis of a potential strike at East and Gulf Coast ports, which handle about 20 percent of the fashion industry’s shipments. In 2011, the 14 ports handled more than 110 million tons of import and export cargo.
“A shutdown would wreak havoc on manufacturers, retailers, farmers and others who depend on the ports to move their supplies and products,” the USMX said, pointing to the country’s top importers, Wal-Mart Stores Inc., Target Corp. and Home Depot Inc., and top exporters such as Weyerhaeuser, DuPont and Cargill.
“Not only would any disruption have serious consequences for the nation’s still-recovering economy, but it would also jeopardize the financial well-being of the ILA’s 14,500 members, who would lose nearly $5 million in wages and benefits for each day they’re out of work, or a total of $150 million in lost compensation in just a month.”
According to the USMX analysis, the ILA’s 3,250 members working at the Port of New York and New Jersey would lose $7.5 million a week in wages. A shutdown would also put at risk 171,000 jobs directly related to New York and New Jersey port operations and result in $100 million in lost revenue a month for railroads, truckers and other port-related transportation industries, which handle 250,000 containers moving through the port each month, the USMX said.
ILA workers at Hampton Roads, Va., would lose more than $10 million in wages and benefits with a one-month port shutdown, and ILA members at the Savannah and Brunswick ports in Georgia would lose an estimated $2.3 million a week in wages and benefits, according to the analysis.
Other industries would be indirectly hurt by a port shutdown as well, according to USMX. For example, the impact of a one-month shutdown of the BMW assembly plant in South Carolina and the Mercedes-Benz plant in Alabama, unable to get parts or cars in and out of nearby ports, could result in the combined temporary furlough of 6,900 workers at the two plants and potentially affect more than 34,000 workers across the country, resulting in the loss of an estimated $52 million in federal, state and local tax revenues over a month.
“While the overall impact of any East and Gulf Coast shutdown is yet to be determined, the 10-day lockout at West Coast ports in 2002 cost the U.S. economy an estimated $1 billion a day,” the USMX said.
More recently, the eight-day strike at the Ports of Los Angeles and Long Beach in November reportedly caused a drop of 2 percent in the volume of containers compared with the same month in 2011.
The group warned that a work stoppage on the East and Gulf Coasts would cause shippers to divert cargo to Canada, Mexico and the West Coast.