Shippers beware: unions at US east coast ports prepare for strike action

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A couple of weeks ago, in an interview with The Loadstar, New York container terminal manager Jim Devine described negotiations between the management and unions over the introduction of automated technology at the New Jersey container facility Global Terminals as “civil, constructive and professional”.

However, at the same time other negotiations have simultaneously been going on between the US Maritime Alliance (USMX) – the umbrella organisation for shipping lines and terminal operators in the east and Gulf coasts that negotiates en bloc with labour – and the International Longshoreman Association (ILA), the stevedore unions representing workers in east and Gulf coast ports over the new master contract between terminals and workers. The current contract is due to expire in September, and a new one beginning 1 October, and while Mr Devine’s local talks may well be collaborative and friendly, talks between USMX and the ILA are turning out to be anything but.

Yesterday USMX president and CEO  James Capo wrote a memo to members outlining fears that talks were on the verge of breaking down and accusing ILA president Harold Daggat of refusing to open talks without having the ILA’s pre-conditions met.

He added that shippers have already begun to plan to channel cargo flows away from those ports in apprehension of port congestion. “I believe that unless meaningful bargaining resumes, they will begin re-routing cargo.”

The gap between the USMX and ILA centres on several key issues – the introduction of automation at east coast ports; weighing containers to increase safety; and the inclusion of chassis pool operators in the alliance, therefore bringing chassis drivers under the agreement – with the last meaningful talks held in March.

For his part, Mr Daggat earlier wrote to members placing the blame for the worsening relations on Mr Capo: “When our ILA wage scale committee meetings concluded in March, the two sides were far apart in their demands and proposals. I continued to have sporadic conversations with USMX chairman James Capo after that date. I was hopeful that these conversations would expand to subsequent meetings and full-blown negotiations. Unfortunately that has not been the case. It appears at this time that USMX is unwilling to agree to the ILA’s main demand for job protection for the members affected by automated terminals.”

However, Mr Capo argued that the ILA’s concerns should be the subject of negotiations rather than pre-conditions to them. “Mr Daggett has put forth several demands, or “hurdles,” as he calls them, but has adamantly refused to negotiate or even discuss these or any other issues at the bargaining table unless management first agrees to his demands. That’s hardly good faith bargaining.”

He further argued that with regards to automation, the ILA is claiming that no worker can be made redundant from any position they currently hold, despite the fact that the current master contract “mandates that both sides negotiate over the impact new technology might have on the work force”.

Indeed, the exact text of the master contract reads: “Management also agrees that the impact on employees of any new technology shall be the basis for prior discussions with the ILA. It is agreed that all affected employees who held positions which have become impacted and discontinued by technology will be afforded the opportunity for retraining at management’s expense to acquire the necessary skills for employment in this industry. Employment positions within the ILA work jurisdiction resulting from technological changes will be offered to ILA employees affected by such changes to the extent that they are able to perform such work with reasonable training.”

The point that the current agreement allows for the introduction of automation was also made by Mr Devine, president of Global Terminals Inc, which announced that it will operate automatic stacking cranes at its expanded Global Terminals facility, and appears to be borne out by the text of the agreement itself.

But by expanding the areas of concern to include chassis pool operators and the issue of container weights, the ILA is turning the negotiations into a swamp of interconnected but nevertheless unrelated issues.

Mr Capo addressed both – firstly, claiming that the USMX has no mechanism to force chassis pool operators to join its ranks, and that anyway, “the pool operators have already agreed to continue to use ILA members to maintain and repair chassis and to honour ILA jurisdiction where it is currently in place”; and secondly that weighing containers in the terminal before they are released would “create more unneeded work, add unnecessary expense and increase congestion at the ports”.

The global shipping industry has to address the issue of container weights. Overweight containers have caused a series of deadly accidents and caused such controversy to the extent that it is now being discussed at the IMO’s (the UN body for shipping) sub-committee on Dangerous Goods, Solid Cargoes and Containers, with the proposal that global legislation will be brought in in 2013 that requires all containers to be weighed at the port of loading prior to loading onto a vessel. Given that most US east and Gulf coast ports are primarily import facilities, this would render the ILA demand redundant – container weights would already be known far in advance of their arrival in the US.

Nonetheless, the prospect of industrial action at a slew of US ports, and the subsequent havoc that is likely to cause US supply chains has considerably increased, given the parting words of Mr Daggat to his members. “I believe all locals [ILA union chapters] covered by the master contract should inform their memberships that they should prepare themselves for any action we may have to take if USMX’s position does not change.”

It has been 35 years since there was last significant unrest on the US east coast – shippers, forwarders and carriers need to start drawing up alternative plans should, as appears increasingly likely, industrial action return.