Potential US East and Gulf Coast Port Labor Strike Could Further Destabilize Trade

Potential US East and Gulf Coast Port Labor Strike Could Further Destabilize International TradeMonday, December 10, 20121

[FONT=Arial]A potential labor strike by longshoremen along the US East and Gulf Coasts at the end of the year could have devastating economic consequences as inventory depletion, rerouting, hoarding, and price speculation ripple through supply chains of global companies, Marsh warned in a new report published today. Those not prepared for such disruption could face adverse operational and economic impacts including increased expenses, decreased revenues, loss of market share, and reputational damage.
The longshoremen’s labor contract with port operators along the East and Gulf Coasts is set to expire December 29, 2012. If a compromise cannot be reached, ports from Maine to Texas could see work stoppages—similar to what was experienced the past eight days with the clerical workers’ strike at ports in Los Angeles and Long Beach, California.
In the event of an additional strike, retail, agriculture, food, and beverage companies would be hit especially hard due to their profit-driven strategy of keeping inventory levels low and the sudden and severe backlog and rerouting pressures caused by a work stoppage, Marsh said in its report: [B]US Port Strikes—What’s at Stake and How to Manage Your Risk[/B]. For each day of backlog accumulated during a port closure, affected organizations would typically need about eight days to stabilize inventory levels within their supply chains, the report said.
“The ability to move goods freely is an essential component of the global economy,” said Gary S. Lynch, Global Leader of Risk Intelligence and Supply Chain Resiliency Solutions for Marsh Risk Consulting and lead author of the report. “As we saw with the West Coast port strike, such events have broad consequences, such as destabilizing trade flows, business, and economic conditions. That strike and a potential East and Gulf Coasts one come at an inopportune time given low growth in key markets like the US, Europe and China.
“This potential crisis on the East and Gulf Coasts and the substantial economic losses that occurred on the West Coast demonstrate why global businesses must be prepared for powerful and possibly crippling disruptions that can happen without warning,” he said. “Those companies with the right portfolio of risk strategies can more effectively protect themselves from potentially severe losses, while simultaneously gaining market share from less-prepared competitors.”
According to Marsh’s report, companies have many options when designing and implementing a risk management portfolio to respond to a port strike. In addition to port-of-entry diversification, companies also should consider various alternative sourcing and buying strategies, changes to their manufacturing process, and risk financing solutions, including voyage frustration and trade disruption insurance
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The ILA sucks! When 333 went on strike in 1988 they thru us under the bus and did NOTHING to support us! I remember talking to a dock worker in Newark and he told me that the ILA used the 333 Strike to scare them so they would not bitch about their next contract. The Dockworkers were also told to ignore any of the 333 picket lines. Union Brothers My Irish Ass!!!

Couldn’t agree with Tugs more, on the above comment! If they do strike, I will literally volunteer for free to cross their picket line and work. The ILA has screwed Local 333 to the point that it’s about to be extinct.

ILA Authorizes Strike at Year-End

Joseph Bonney, Senior Editor | Dec 10, 2012 12:34PM EST

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International Longshoremen’s Association President Harold Daggett won authorization from ILA delegates to call a strike if a bargaining impasse isn’t settled before the union’s contract expires Dec. 29.

The vote by the ILA’s 200-member wage scale committee moves East and Gulf coast ports closer to their first coastwide strike in 35 years.

Daggett asked the ILA’s 200-member wage scale committee for strike authorization after he delivered a speech accusing United States Maritime Alliance of trying to reverse gains the ILA has made in previous contracts.

The roll call vote in favor of the strike authorization was unanimous, ILA spokesman James McNamara said.

The vote preceded a session today in which employer representatives presented USMX’s proposals to wage scale committee members meeting in Delray Beach, Fla.

Daggett’s speech to ILA delegates reportedly emphasized USMX’s proposal to cap container royalty payments to workers. USMX has proposed capping payments at current levels, which averaged $15,500 per eligible worker last year, and using the excess to fund other ILA benefits.

An ILA strike would affect container and roll-on, roll-off cargo covered by the ILA-USMX coastwide master contract. The ILA would continue to work breakbulk cargo and cruise lines that employ ILA labor but are not covered by the master contract, McNamara said. Perishables and military cargo also would be exempt, he said.

In addition to issues in the coastwide master contract, this year’s negotiations over supplementary local contracts have been contentious, especially in the Port of New York and New Jersey, where the New York Shipping Association is seeking changes in work rules, including requirements for extensive relief staffing.

With what these guys make they have balls to go on strike. I hope the ILA gets it stuck to them.

[QUOTE=Tugs;90557]The ILA sucks! When 333 went on strike in 1988 they thru us under the bus and did NOTHING to support us! I remember talking to a dock worker in Newark and he told me that the ILA used the 333 Strike to scare them so they would not bitch about their next contract. The Dockworkers were also told to ignore any of the 333 picket lines. Union Brothers My Irish Ass!!![/QUOTE]

How true. It was a head scratcher for me why the “mother union” would not support the Marine Division.

I went through the SIU strike in Baltimore (October 1987) with Curtis Bay.

When I inquired as to why the longshoremen were working ships put alongside with scab tugs & docking pilots, I was told we did not have an informational picket line set up at the various state marine terminals. So, I volunteered to walk picket duty out in front of Dundalk MT and was told by the SIU that is was not authorized, so we couldn’t do it.

I am still convinced that if we had support from the ILA, we might have stood a chance. When the docking pilots decided to return to work, that really broke our back.

Oh boy, I’d love to go on about my experience during the SIU strike…

ILA, USMX to Meet on Royalties

Joseph Bonney, Senior Editor | Dec 12, 2012 2:32PM EST

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International Longshoremen’s Association President Harold Daggett said a meeting with management negotiators next week on the issue of container royalties will determine whether the ILA carries through on its threat of a year-end strike.

At the end of three days of meetings with United States Maritime Alliance in Delray Beach, Fla., Daggett said a bargaining session next Tuesday will focus exclusively on container royalties that provide annual payments to dockworkers.

“If we come to a decision on container royalties, then we’ll move on and not have a strike,” Daggett said. He added that if the ILA and USMX can’t work out a deal on royalties, the ILA is prepared for a Maine-to-Texas strike.

“We’re going to get the container royalties, and if we don’t, we’ll be on strike,” Daggett said. But he added, “I’ve got a feeling that if we work that out, we’ll be able to move on into the future.”

The ILA’s wage scale committee, representing East and Gulf Coast union locals, voted Monday to authorize Daggett to call a strike if the ILA and USMX can’t agree on a contract before a 90-day extension of the current agreement expires Dec. 29.

Daggett requested the strike authorization to demonstrate support for his bargaining position at the start of this week’s negotiations. The Federal Mediation and Conciliation Service is overseeing the talks.

James Capo, chairman and CEO of United States Maritime Alliance, confirmed that small committees of the ILA and USMX would meet on Tuesday to discuss container royalties. He would not comment further.

Complete Coverage of ILA-USMX Negotiations

Container royalties and local work rules have emerged as top issues in this year’s ILA-USMX negotiations, which Daggett said have been “rough, rough, rough.”

“There’s a lot on the line,” he said. “The biggest thing is container royalties. We know we have to have container royalties to survive the next six years.” The ILA and USMX are aiming for a six-year contract.

Daggett has insisted the ILA would not accept an end to caps on royalties, which were established in the 1960s to cushion union members from job losses resulting from containerization.

Ocean carriers pay per-ton fees into programs used mainly to provide ILA members with cash payouts each December. Eligible workers’ checks averaged $15,500 last year, when carriers paid $211 million in royalties. Ten percent of royalty payments go to the ILA treasury.

USMX has proposed capping payouts to workers from container royalties at current levels, and using the excess to fund other ILA benefits. USMX also has proposed eliminating royalties for future hires.

It was not immediately clear how much the two sides budged from their earlier negotiating positions this week.

Besides container royalties, USMX has proposed revising the master contract to provide more flexibility in revising port-specific work rules in local contracts that supplement the coastwide master contract.

Employers want to revise local contracts to synchronize work shifts and curb payment for hours in which no work is done. The ILA is resisting those changes, aimed primarily at the high-cost Port of New York and New Jersey.

The ILA hasn’t had a coastwide strike since 1977, but this year’s negotiations have followed a rocky course since they kicked off in March.

Bargaining has been punctuated by acrimonious exchanges between Daggett and Capo. Talks broke off in August after Capo said the ILA was unwilling to consider USMX proposals.

The ILA and USMX agreed last summer on union demands for a program to pay workers displaced by automation, and on ILA jurisdiction over chassis repairs.

Negotiations resumed in September after the federal mediator became involved, but the ILA-USMX negotiations remain strained.

Last month, Daggett broke weeks of public silence by declaring that the ILA would not accept caps on payouts to workers from carrier-paid container royalties, and that the union would resist work-rule changes. Capo responded that the ILA leadership appeared to view bargaining as “a one-way street that leads only in their direction.”

The ILA’s coastwide master contract covers container and roll-on, roll-off cargo. Breakbulk shipments are covered by local contracts. Because the ILA faces non-union competition for breakbulk shipments, it would continue working that cargo even if the union struck container lines.

Contact Joseph Bonney at jbonney@joc.com, and follow him at twitter.com/JosephBonney.

Carrier-paid container royalties, you have got to be kidding me. They said this was started in the early 1960’s to help offset the money lost due to container rather than Break Bulk. Well, 1960 was a long time ago and nearly everything is shipped in Containers now. They also mentioned a $15,000 yearly bonus. That is crazy! With what these guys make to put a Container Bonus on top of it it nuts. This just another instance of Unions driving up the cost of everything. Years ago Unions were very necessary (and still are in some fields) but now they only look out for themselves not the average worker. They will sell the membership out in order to get more money paid to the Union it’s self.

Just for the record, I am retired from a Union but I have seen both sides and Unions like the ILA are nothing but a bunch of Thugs that should rot in hell for what they did to the members of Local 333 UMD in the 1988 strike. And yes as my wife says, I can and do hold a grudge for a long time.

[QUOTE=Tugs;90751]Carrier-paid container royalties, you have got to be kidding me. They said this was started in the early 1960’s to help offset the money lost due to container rather than Break Bulk. Well, 1960 was a long time ago and nearly everything is shipped in Containers now. They also mentioned a $15,000 yearly bonus. That is crazy! With what these guys make to put a Container Bonus on top of it it nuts. This just another instance of Unions driving up the cost of everything. Years ago Unions were very necessary (and still are in some fields) but now they only look out for themselves not the average worker. They will sell the membership out in order to get more money paid to the Union it’s self.

Just for the record, I am retired from a Union but I have seen both sides and Unions like the ILA are nothing but a bunch of Thugs that should rot in hell for what they did to the members of Local 333 UMD in the 1988 strike. And yes as my wife says, I can and do hold a grudge for a long time.[/QUOTE]

Be thankful you don’t have to deal anymore with the Bay St. scumbags today that call themselves Local 333. A self appointed trustee who claims that “once the union is fixed, we’ll have elections!” They’ve lost K-Sea, Kosnac, and the Penn contracts and not breathed a word about it. The only thing they put on their website is a smear letter from 2011 about the former President and to announce their damn Xmas party that our dues are paying for. The delegates have received board positions with the UMD and don’t even bother showing up to the boats to check dues anymore! If I had any plans of staying at Moran, I would be pushing a decertification vote!