Federal mediator: Port strike averted

Published 10:55 am Monday, December 31, 2012


SUFFOLK—With East and Gulf Coast port workers still threatening to strike, the nation’s top peacemaker has announced another meeting between the two warring parties in the hopes of avoiding a “devastating” blow to the economy.

The International Longshoreman’s Association and the United States Maritime Alliance have agreed to return to the bargaining table after Federal Mediation and Conciliation Service Director George Cohen called for fresh talks ahead of Saturday’s expiration of an extended contract between dockworkers and employers.

At issue in the dispute, which could have serious consequences for Suffolk’s economy because of the heavy concentration of warehousing and distribution facilities, are container royalties that supplement waterfront workers’ wages.

The association represents 14,500 workers at more than a dozen ports; alliance members include their employers — 24 container carriers, including the world’s 10 largest, and all major marine terminal operators on the coasts.

Port of Hampton Roads longshoremen received a royalty benefit of $16,856.37 for the 2011-2012 contract year, according to the association.

Checks are drawn from the Container Royalty Fund, established to provide compensation for loss of work. Carriers pay into it based on tonnages assessments.

The alliance says the payments have “increased dramatically” since being introduced in the 1960s to protect union workers from job losses due to the advent of containerization and increasing automation, rising to more than $211 million in 2011.

“Not all of that money ends up in the pockets of ILA members; their union gets 10 percent — $21 million last year — through a checkoff from each member’s royalty payment,” it says.

“The initial reason for implementing container royalties — to protect ILA members from the loss of work — has long been forgotten.”

A sharp increase in cargo tonnage over the years, the alliance says, has caused royalty payments to rise “dramatically.” In Savannah, for instance, per-worker payments have skyrocketed from $6,028 in 1996 to almost $36,000 in 2011.

“In the current negotiations over a new Master Contract, management is not asking to eliminate container royalties, only to cap the payments and use the excess, not as savings for employers but to help pay for other benefits for ILA workers,” the alliance says.

But the association says that the royalties, which members must earn by working a certain number of hours a year, ensure a workforce exists for the ports.

“ILA work isn’t like other professions,” it says. “No ships mean no work, but employers depend on a strong and skilled workforce when ships need to be worked.” The alliance’s “ultimate goal is to eliminate (the) Container Royalty, based on their proposal to end it 25 years ago.”

The alliance also says that the automation of container terminals — APM Terminals Virginia just over the Suffolk-Portsmouth line is billed as the most technologically advanced such facility in the Americas — “continues to reduce the number of hours for hard working ILA members.”

But averting any waterfront shutdown, which could cost Hampton Roads ILA workers over $10 million in lost wages and benefits over one month, is in union members’ best interests, the alliance contends.

“A strike or work stoppage at the East and Gulf Coast ports would have a devastating impact on the U.S. economy, disrupting the flow of international trade and commerce in and out of the 14 ports from Maine to Texas,” it says.

Meanwhile, National Retail Federation President/CEO Matthew Shay has written to President Barack Obama on the urgency of a resolution, saying, “a strike of any kind at ports along the East and Gulf coasts could prove devastating for the U.S. economy.”

Local officials could not be reached by phone Wednesday to further explain union demands.

In a Dec. 19 letter, association President Harold Daggett instructed local ILA unions to “begin immediately to prepare for a strike” by establishing strike committees responsible for orchestrating picket duty.

During a strike, according to the letter, orders to handle containerized cargo would be ignored. Passenger ships, perishable commodities, containerized military cargo and mail and all non-containerized cargo and automobiles would be handled.

Language for picket signs would be pre-approved by the ILA General Counsel’s office and violence on picket lines prohibited. Transgressors of these or other strike rules or directives would be disciplined under the ILA Constitution.

The impasse between the association and the alliance and strike threat has been ongoing for several months.

The federal government stepped in to help broker an agreement with mediated negotiations during the week of Sept. 17, resulting in the contract extension and avoiding a strike scheduled to begin on Oct. 1 in lieu of an agreement.

Both parties have agreed to attend this week’s meeting that was announced on Christmas Eve, Cohen stated, adding that no further comment could be made due to “the sensitive nature of the negotiations.”

Western Tidewater warehouse, distribution and manufacturing facilities employing thousands could be adversely affected if a strike occurs.

A West Coast waterfront strike recently shut down the majority of terminals of the Los Angeles and Long Beach ports.