Businesses Ask Obama to Intervene on Longshoremen, as ILA Details Issues and Ports Begin Preparing

As business interests again pressed the government to intervene in the East/Gulf Coast longshoremen dispute, the International Longshoremen's Association outlined its disagreements with the shippers' contract offer, and ports began to prepare for a strike beginning Dec. 30.

A coalition of more than 100 national and state associations, led by the National Retail Federation, again sent a letter (here) to President Obama Dec. 20 to "urge immediate action by your administration to ensure that a strike does not occur when the current contract extension expires on December 29." Copies of the letter were sent to members of Congress, cabinet officials and governors.

The group said failure to reach a contract agreement would result in a coast-wide shutdown at 14 containerized ports from Maine to Texas, and would have "serious economy-wide impacts." Signers included the National Customs Brokers and Forwarders Association of America, Harbor Association of Commerce & Industry, American Import Shippers Association, American Trucking Associations, Alliance of Automobile Manufacturers, North American Shippers Association, National Industrial Transportation League, American Apparel & Footwear Association, U.S. Association of Importers of Textiles and Apparel, American Farm Bureau Federation, National Association of Manufacturers, National Retail Federation, Toy Industry Association and the U.S. Chamber of Commerce.

The ILA's key issue is keeping the container royalty fund as it is in current contract, it said in a posting on the contract issues (here). The U.S. Maritime Exchange, representing ILA employers, wants a cap on how much money is put into the Container Royalty Fund for current longshore workers and ultimately, eliminate the fund, it said.

It said the fund was established in the 1960s to protect longshoremen from job losses created by containerization and automated cargo: "When containerization started the ILA was faced with a huge displacement of worker whose jobs were eliminated by the ominous steel boxes. ... The ILA agreed to allow containerization to flourish but negotiated a fee based on the weight of each loaded container to be used for annual payments to the longshore workers whose job opportunities had been compromised due to containerization. As the number of containers being handled increased, the negotiated payment for each worker increased. Rather than being an annual bonus for each worker, as USMX suggests, this payment is compensation for the job opportunities lost by permitting containerization." 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, it said.

It said ILA and USMX have exchanged proposals on wages based on a tentative six-year contract. But it said USMX "continues to treat ILA workers like second-class citizens." It said USMX also is proposing deferring payments into the ILS health care fund for two years because of the size of its reserve.

ILA said it and USMX did reach tentative agreements on automation and container chassis work and on some jurisdiction language. There are also local issues at individual ports, it said.

Meanwhile, the Port of Virginia (here) has started preparing for a strike, it said. Port officials and stakeholders had their first planning meeting Dec. 17, and other meetings will be scheduled as needed, it said.

The port is currently "working to clear cargo to ensure that as few containers as possible are stranded inside the gates at the state-owned terminals, if and when they are closed by labor action," it said. Port officials also are considering a modified operations schedule to accommodate the effort to clear the terminals, but the terminals are scheduled to be closed for the Christmas holiday on Dec. 24-25.

North Carolina ports continue to "monitor the negotiations closely and remain hopeful for a timely resolution," a spokeswoman said. "As operator of the terminals at Ports of Wilmington and Morehead City, we will continue to work under the direction of the ocean carriers. Terminal services provided by the NC Ports will be available regardless of any potential strike. Lines of communications remain open with customers and port partners regarding updates on the negotiations and potential impacts."

The Port of Baton Rouge has "been watching the situation," a spokeswoman said. "The Port of Greater Baton Rouge, which primarily handles bulk and breakbulk cargo, and we are not anticipating that the port will be affected by a looming strike that could hit other Gulf and East Coast port,” said Jay Hardman, executive director of the Port of Greater Baton Rouge.