USMX Says Container Royalties Outdated, Should be Capped

Container royalty payments to International Longshoremen's Association workers have "increased dramatically" since they were created in 1960, reaching over $211 million in 2011 alone, according to an Aug. 28 backgrounder on the U.S. Maritime Exchange website.

"The initial reason for implementing container royalties -- to protect ILA members from the loss of work -- has long been forgotten," the unsigned USMX paper said. It said payments in 2011 averaged $15,500 for ILA workers at the 14 East and Gulf Coast ports.

But, unlike the Port of New York and New Jersey, ILA workers at ports like Savannah and Charleston saw their job opportunities grow because of containerization, it said: "The container royalties they receive have been a bonus that has nothing to do with any adverse job impact caused by containerization."

"In reality, container royalties have morphed from an assessment imposed through arbitration in 1960 to what they are today -- another form of compensation for ILA workers, who are among the nation's most highly compensated," USMX said. "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."

ILA officials didn't immediately comment.