ILA, USMX to Resume Talks, End-of-Year Port Strike Looming

GDA Staff -- Gifts and Dec, 12/26/2012 10:34:12 AM

NEWARK, NJ - The United States Maritime Alliance (USMX) and the International Longshoremen's Association (ILA) have agreed to continue talks to reach a contract deal, which could prevent an end-of-year port strike stretching from Maine to Texas. The move was called for by the Federal Mediation and Conciliation Service (FMCS), following the recent breakdown of talks just days before the current extension expires on Dec. 29.

"FMCS Director George Cohen has called a meeting of the ILA and the Maritime Alliance in advance of the December 29th expiration of the contract extension," said George H. Cohen, FMCS director, on the East Coast ports labor negotiations. "The parties have agreed to attend. Due to the sensitive nature of the negotiations FMCS will have no additional comment at this time."

Despite the presence of the FMCS, talks broke down on Dec. 18 over the issue of container royalties, a supplemental, per-unit fee desired by the ILA. Following the breakdown of talks, the ILA issued strike preparations for a Dec. 29 strike.

Earlier in the month on Dec. 10, ILA Wage Scale delegates rejected the USMX proposal for a Master Contract and voted to strike when the current extension expires at the end of December. The FMCS recommended a short contract extension to keep both parties at the bargaining table. While the USMX agreed to the extension, the ILA rejected it, refused to discuss any changes to container royalties and renewed its vow to strike.

Talks between the ILA and USMX started in March 2012, six months before the initial contract expiration and continued on into July. In August, the ILA walked out of a three-day negotiation meeting after it rejected a USMX request to discuss changes in work rules and pay practices. By September, the USMX and the ILA resumed talks and agreed to extend negotiations on a new Master Contract through Dec. 29, in an attempt toprevent any disruptions to crucial shipments arriving for the 2012 holiday season.

"It is extremely disheartening to learn that the two sides failed to reach an agreement during today's negotiations," said Jonathan Gold, vice president for supply chain and customs policy, National Retail Federation, in a statement immediately following the Dec. 18 talks. "It is imperative that both sides verbally announce their intentions to return to the negotiations. A coast-wide port shutdown would have a significant impact across all businesses and industries that rely on the ports, particularly retail. The last thing the economy needs right now is another strike, which would impact all international trade and commerce at the nation's East and Gulf Coast container ports. This is truly a ‘container cliff' in the making."

The Retail Industry Leaders Association (RILA) also expressed its concern over a possible end-of-year strike and even called on President Barack Obama to take action in preventing a strike on the East and Gulf Coasts.

"RILA is extremely concerned about the potential short and long term consequences to our members, their employees and customers as well as to the economy if cargo is stalled along the East and Gulf Coast ports," said Sandy Kennedy, president, RILA. "If a work stoppage occurs at the end of the month, it will substantially affect the already delicate economy. In order to prevent another prolonged and damaging stoppage, we respectfully request you put the weight of the White House behind resolving this dispute and bringing the ILA and USMX back to the negotiating table."

A shutdown would wreak havoc on manufacturers, retailers, farmers and others who depend on the ports to move their supplies and products, according to the USMX. At the Port of New York and New Jersey, which employs more ILA members than any of the 13 other East and Gulf Coast ports, the union's 3,250 members would lose $7.5 million a week in wages alone.

If a strike takes place, thousands of members of the ILA, including dockworkers at New York and New Jersey ports could walk out of their jobs on Dec. 29. New York and New Jersey ports alone account for nearly 171,000 related port operations. A strike could heavily congest West Coast ports and cause vessel delays. West Coast shippers are still recovering from a recent eight-day strike by the International Longshore and Warehouse Union Local 63 Office Clerical Unit ("OCU") against terminals at the Port of Los Angeles and Port of Long Beach in November.