East Coast Longshore Workers to Start Negotiations on New Contract
The International Longshoremen’s Association, whose members work at the ports along the East and Gulf coasts, is getting ready to start negotiating a new contract at the end of March. The current contract expires Sept. 30.
East Coast ports have not had a strike in 35 years, but upcoming negotiations could get contentious over one issue: automation.
“Be certain. This is a very serious subject for me,” said Harold Daggett, president of the International Longshoremen’s Association, based in North Bergen, N.J.
Daggett was in Long Beach, Calif., on March 5, speaking at the 12th annual Trans-Pacific Maritime Conference, which is attended by more than 1,800 executives from ocean carriers, logistics providers, trucking companies, railroads and ports from around the world.
The union leader pointed out that when Maersk Inc. and APM Terminals set up their automated operation recently at Portsmouth, Va., in the Port of Hampton Roads, the ILA lost more than 30 percent of its workforce.
With rumblings of a strike, retailers already are talking about diverting their cargo as early as this summer to West Coast ports and then shipping their cargo containers by truck or rail to the Midwest and the East Coast, according to David Arsenault, a vice president of Hanjin Merchant Marine.
Technology and automation are traditional sticking points when it comes to port contract talks. In 2002, the International Longshore and Workers Union, whose members work at West Coast ports, were locked out of the ports for 10 days after contract negotiations bogged down over technology and healthcare. The result was many importers missed deadlines for filling holiday orders and lost millions of dollars. Toyota estimated it lost $80 million during the lockout.
In the end, the ILWU agreed to the free flow of electronic shipping data to and within port terminals without marine clerks rekeying in data. The result was faster processing of cargo containers from ships to the terminal gates and a reduction in clerks.
At the upcoming contract talks, James Capo, chairman and chief executive of United States Maritime Alliance (USMX), is in charge of negotiating on behalf of East Coast terminal operators, carriers and local port organizations that employ the longshore workers. Speaking at the same conference as Daggett, Capo said he hopes the negotiations, which begin in Tampa, Fla., will deliver a contract that does not involve a strike. “Unsuccessful negotiations are not in the best interest of the 14,000 members of the ILA,” Capo said. “I would be less than honest to say there are challenges that need to be addressed.”
He said the ports and terminals will push to incorporate more technology and automation.
“Our mission at USMX is to protect the industry’s market share,” he noted. “In order to achieve this mission, the industry must maintain its ability to introduce new technology to increase the capacity [and productivity] of our ports, attract capital and promote growth.”
Another issue expected to be on the negotiating table is chassis. Shipping lines have been spinning off their chassis services to private companies that may not be obliged to use union labor to repair and maintain the wheeled frames that are attached to cargo containers for transportation.
In February, Danish shipping line Maersk Inc. agreed to sell its chassis-leasing subsidiary to Littlejohn & Co., a private-equity company in Greenwich, Conn. The sale has startled longshore union officials, who see this as a trend. APL, a division of Neptune Orient Lines in Singapore, expects to be out of the chassis-service business by 2014.
Overweight cargo containers are another hot issue up for discussion. Incorrectly weighed cargo containers have been blamed for vessels incorrectly loading cargo containers because of inaccurate information.
Some carriers report it is not uncommon for ships to be overloaded by 3 percent to 7 percent above the registered weight.—Deborah Belgum
