Whatever happened to the strike by the International Longshoremen’s Association (ILA) that was supposed to start October 1? The answer: It’s on hold. On September 20 the Federal Mediation and Conciliation Service (FMCS) announced that the ILA and a shipping industry consortium, the U.S. Maritime Alliance (USMX), had agreed to continue negotiations until December 29. The 90-day contract extension averts a potentially crippling walkout at Atlantic and Gulf Coast ports. The extension, says FMCS Director George Cohen, allows each party to focus on “outstanding core issues in a deliberate manner apart from the pressure of an immediate deadline.” The ultimate issue, however, remains: union-driven work rules and accompanying corruption that raise shipping costs to often exorbitant levels.
This past September 10, Union Corruption Update explained in detail the context, likelihood and ramifications of a Longshoremen’s strike. The North Bergen, N.J.-based ILA, which represents about 65,000 dock and auxiliary employees in the United States, Canada and Puerto Rico, had been signaling for months to the U.S. Maritime Alliance that it might stage a walkout after its existing collective bargaining agreement expired on September 30. While such action would have involved about 14,500 of those workers, it would have thrown a wrench into time-sensitive supply chains and retail operations. “Failure to reach agreement will lead to supply chain disruptions, which could seriously harm the U.S. economy,” remarked Matthew Shay, president of the National Retail Federation, several weeks ago. A ten-day employer lockout at nearly 30 ports in the fall of 2002 in response to a work slowdown by the ILA’s West Coast counterpart, the International Longshore and Warehouse Union, cost the U.S. economy about $2 billion per day, asserts Maryland Port Administration Executive Director Jim White.
ILA officials are aware of such consequences for the Atlantic and Gulf coasts. But they’ve been insisting that it is management, not the union, who has been bargaining in bad faith. “I thought we were doing OK until they (the U.S. Maritime Alliance) dropped the bomb on us,” said ILA President Harold Daggett (see photo). The “bomb” refers to the insistence by USMX upon efficiency-boosting technologies and controls on already generous union employee compensation. But since these reforms could cost some union jobs, Daggett refuses to go along. “Your true goal seems to be productivity for the shippers and unemployment for the ILA,” he wrote in a June 2 letter to Alliance CEO James Capo. Nearly three months later, Capo wrote Daggett that the shipping industry’s presentations “were simply rejected without any consideration.”
Can federal mediators break the impasse? So far, they haven’t been successful. On key issues – i.e., a guarantee of zero job loss, ILA Wage Scale Committee negotiation rules – the two sides remain far apart. As talks are being held in secret, news of progress isn’t likely to be forthcoming in absence of a breakthrough. Retailers, at least, are breathing easier. A strike could have meant a lot of empty shelves over the coming months. As one Northeast shipping executive explained prior to the announcement of the 90-day bargaining extension: “It’s a tough situation. When you have lead times of 45 days in some cases, it can make it hard to plan inventory that far ahead in advance, especially when it became clear that this situation was not going to be quickly resolved. And there is no alternative sourcing in the U.S.” The resumption of talks, at least, virtually ensures a normal Christmas shopping season.