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The US National Retail Federation (NRF) has urged President Obama to step in to prevent an east and gulf coast port strike, following the breakdown of talks between the US Maritime Alliance (USMX) and the International Longshoremen’s Association (ILA) union over the issue of container royalties. Both parties have blamed the other for rejecting to prolong the 90-day extension, brought into force when the previous contract expired at the end of September.

“The retail industry, once again, calls on President Obama to engage directly in the negotiations,” said Jonathan Gold, NRF vice president for supply chain and customs policy. “The president should utilize all available tools, including Taft-Hartley, to eliminate even the threat of a strike or lockout. The time for leadership is now.”

The economic impact of the recent strikes at the ports of Long Beach and Los Angeles was about $2.5bn per day, according to Sean Strawbridge, managing director of Trade Relations and Port Operations of the Port of Long Beach.

The east coast strike was averted just before the ports’ busiest time of the year in September when the Federal Mediation and Conciliation Service became involved and suggested the extension. But a second extension is looking increasingly unlikely, say both parties.

In a statement the ILA said: “The ILA wanted to say “Happy New Year” with a contract extension to February 1, 2013, but United States Maritime Alliance answered with a resounding ‘bah humbug’ and rejected an ILA offer to extend the deadline of the current master contract through the end of January 2013.”

Meanwhile, in the other corner, the employers’ group claimed: “While USMX agreed to the extension, ILA rejected it, refusing to discuss any changes to the status quo on container royalty and renewing its vow to strike. During a meeting December 10, the ILA Wage Scale delegates rejected the USMX proposal for a Master Contract and voted to strike when the current extension expires on December 29.”

Clearly, both cannot be right.

The deal breaker has been container royalties – a tonnage-based payment made to union members – which, said the ILA, is ‘untouchable’.

The USMX offered to protect container royalty payments at 2011 levels for current recipients for 25 years, or whenever they leave the industry, but new employees would not be eligible.

“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 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.”

The stand-off could force the ILA to strike on 30 December, a move which it claims it does not want to do. Shipping lines, which have to give a month’s notice, have announced surcharges.

“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,” said James Capo, USMX chairman and CEO. “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.”

The USMX said it had also offered a six-year contract, and that tentative agreement had been reached on three key issues: protection for individuals who may be displaced as a result of new technology and automation; the ILA’s continued jurisdiction over chassis maintenance and repair work in marine terminals and port areas covered by the master contract; and strengthened authority of the joint ILA/USMX jurisdiction committee to resolve disputes.

It also claims to have offered two wage increases of $1 each over the terms of the agreement, while the ILA’s average hourly rate would increase to more than $55, including overtime and container royalty. It also promised guaranteed funding for healthcare benefits, operational improvements and funding for local ports experiencing difficulties.

The NRF’s Mr Gold added: “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.

“The last thing the economy needs right now is another strike, which would impact all international trade and commerce at the nation’s East and Gulf Coast container ports. This is truly a ‘container cliff’ in the making.”

The Taft-Hartley Act, which was last invoked in 2002 by President Bush when talks failed at west coast ports, can suspend shutdowns for 80 days if deemed vital to the US economy and military.

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  • michelle

    December 19, 2012 at 3:53 pm

    Um, sorry but I don’t see how the average pay is $55 per hour. My husband in Jacksonville does not make that per hour. Jacksonville Florida port is treated like the red-headed step-child of the ILA. Companies aren’t paying royalties owed as it is now and the USMX wants to take away more. Royalty is like a Christmas bonus we look forward to every year. But I guarantee you Jacksonville’s royalty ain’t even half of what other east coast ports are banking in royalties. The USMX is trying to make the ILA look bad but I’m sorry a bulldog doesn’t back down when somebody’s trying to take away his bone!!!

    • Danny

      December 19, 2012 at 7:56 pm

      Well spoken Michelle. I’ve worked on the waterfront in Wilmington for 32 years and never made the kind of money that the USMX is putting out there. The first ten years, I didn’t even make $10,000 a year, had no benefits and no container royalty. My family paid the price over the years for the crazy hours I’ve had to work. We could never make plans as I always struggled to make the hours required to keep my benefits. I’m sure you went through the same thing. As it stands now my pension will be less than $1300.00 a month with 30 years of service when and if I can ever retire. While $32.00 dollars an hour sounds like a generous wage to the average worker, you have to take into consideration that we only work when the ships come in. They hire and fire us every day. I thank our leaders for taking a stand and not going backwards. Let the USMX keep throwing out the misleading figures. We know what the real story is. I just wish there would be more responsible reporting of the facts from both sides of the fight.

      • michelle

        December 24, 2012 at 1:57 pm

        Right on Danny. They don’t see that longshoreman do not have a guaranteed work schedule or a regular 40 hour week. You may get lucky to get 15 hours depending on your seniority. You fight tooth n nail to make enough hours in a year to even get any benefits. And yes night work takes away from family. How many times have you worked on Thanksgiving and Christmas Eve? Shipping/receiving is a 24/7 operation and it doesn’t stop always for the weather and there must be manpower to keep it running smooth. And they are also saying the average royalty is right under $16,000…yeah ok…jacksonville’s longshoreman aren’t getting that kind of bonus. I think they were lucky to get maybe $6,000 before taxes and ILA dues!!

  • Alex Lennane

    December 19, 2012 at 9:04 pm

    Thank you for your comments. We welcome other viewpoints – from both sides – on this complex issue.


    December 20, 2012 at 3:55 am

    It’s true what Danny says. Nobody sees that longshoremen keep working in hard rain, and under the hottest sun in the summer.
    And nobody sees that you have to wake up at 4:30 am to be at the hiring, and we start getting paid at 7:00 am or 8 am.
    At the beginning it’s a hard sacrifice, and only the longshoremen know how it really is.

  • Carolyn Singer

    December 20, 2012 at 3:56 pm

    I agree with everyone. My husband has been a longshoremen for 39 years at the Port of Baltimore. He works in the worst weather and none of the companies appreciate anything those guys do. Taking away the container royalty would be a slap in the face for all longshoremen. They work very hard at their jobs and it’s very dangerous as well. I stand behind my husband and the rest of the longshoremen who need to make it clear to everyone out there, they are not going to take any more cuts, so if they go on strike those business are just going to have to understand. They don’t make $55.00 an hour not even in overtime. We are afraid that local contracts are going to get worse after the master contract is settled.

  • Carl C.

    December 21, 2012 at 2:20 pm

    I am a member of ILA local #1 I Newark NJ. I make good coin but I work 6-7 days a week. I miss a lot of family events because I am working. I work as much as possible because I want set up a future for my children. Yes I make over $200k. Yes my royalty is $20k but I work my a** off for that money!

    • michelle

      December 24, 2012 at 2:09 pm

      Yep, they don’t see that you might be doing 19 hours straight and then going back out to do another 10 with very little sleep. And not all longshoreman are making $200k. When starting out, you have to work another job until you build your seniority. I think most low seniority longshoreman average $55k a year but that’s before taxes and dues; with seniority prob average is $90+ but that’s getting over 2,000 hours a year and fighting over 100+ other longshoreman to get it. How many longshoreman are in their late 60’s or early 70’s still working because like Danny says retirement plan is crap!!!

  • Dan

    December 26, 2012 at 8:35 pm

    55 is the average…..key word is average.
    Having worked both sides I have to say you may want to look at the history of the Royalties. They were never meant to be a long term benefit or a Christmas bonus. Of course even with an agreement the odds of taking back any benefit, even designed as a temporary fix, becomes a fight because people believe they are entitled or somehow have earned it and they forget the history of why royalties are paid.
    Union work is tough and that is due to the union and not the companies providing the jobs. The union believes more in getting higher wages than partnering with the companies that pay for the union services to create a safer and less labor intensive work environment for the members. They put the money above the workers safety because they live on union dues and not workers returning home to their families at the end of the day. We see this everyday and many of us on the company side have been in your work boots being ex ILA. I wanted a future and a good retirement and the union could not provide that. Unfortunately not all can have a choice as I have guys making over 300k working less than 30 hrs but have felonies and no high school diploma so they could not even get hired at McDonalds. The ILA has been good to some.
    Fortunately all the whining is due to a choice. The hours are odd and weather and hazards are there but no one is forced to hire out so it is a choice.
    Do some research and get the facts on why there are royalties. Don’t blindly believe the union brass that only cares about your dues paid in the end. They sell a spiel to the sheep about all kinds of reasons for the union but get the facts before trusting as they do not have your best interest in mind. Don’t fool yourself it is about anything other than greed and they are willing to crash a limping economy to assure they get more when the rest of the world is living in reality and thankful to have work rather than demanding more money. Remember the union has never created one job….the companies create the work and this is just biting the hand that feeds them.

    • michelle

      December 27, 2012 at 6:24 pm

      Dan, the companies continue to take and take and take away from union members; so yeah there’s some things we would like to keep as our benefit. And royalty is #1. Unions continue to bend over and give and give and give in order to just keep the jobs for their members. Unions have a long standing history in America and they help America stay strong and proud to do the work they do which is a thankless job in a company man’s eyes such as yourself. I don’t know about your union workers being felons because I know with the twic badge, you can’t get one with felonies and quite many of them have an education or even continuing their education. Many union members have worked hard to keep the union strong for their family members that come after them. So I don’t know who you work with that you think safety is not important when before each shift a prayer is said for safety to return home to the families they work so hard to provide for just as you do. And they are thankful to have union representation whether the “top brass” as you call it is only concerned about greed or not. Selling a speil to the sheep…come on man; just like our President does?? Any top brass in any company or union is more concerned about their bonuses and their families more so than their workers; even though it’s the workers who keep the company moving just as longshoreman keep commerce moving.