US East And Gulf Coast Ports Strike Deadline Set For Sunday

A breakdown in collective bargaining for a new master agreement between the International Longshoremen's Association, or ILA, and the U.S. Maritime Alliance, or USMX, could lead to the second major labor-management dispute in the country's container-shipping industry this month.

The ILA -- representing more than 14,500 dockworkers at 14 ports along the coasts of the Atlantic Ocean and Gulf of Mexico from Maine to Texas -- has set a strike deadline for Dec. 30 at 12:01 a.m. EST.

The walkout could be avoided at that time should the USMX -- representing all the major marine-terminal operators and port associations on the East and Gulf coasts, as well as 24 container carriers -- agree to extend the current contract until Feb. 1 by taking one key issue off the table.

However, the parties have not yet come to a meeting of the minds on this key issue, which centers on so-called container royalties.

"USMX seems intent on gutting a provision of our master contract that ILA members fought and sacrificed for years to achieve," ILA President Harold J. Daggett said in a statement. "We have repeatedly asked them to leave this item alone -- it was a hard-won gain by ILA members and a wage supplement achieved through hard-fought negotiations."

According to the USMX: "Container royalties were first established in 1960 as a way to protect ILA members in New York from job losses created by containerization. Today, thousands of ILA workers who were not alive in 1960 continue to receive container-royalty payments that in 2011 totaled $211 million -- an average of $15,500 for ILA workers at the 14 East and Gulf Coast ports." The employers' group added it is not attempting to cut the container royalties in their entirety but trying to limit the payments.

Calls For Intervention

A strike would have a significant effect on cargo-handling operations at the 14 ports. In the event of a walkout, the ILA's Daggett advised local unions in a memo to have members limit their services to containerized mail, containerized military cargo (excluding household goods), passenger ships, perishable commodities (such as fresh food), and noncontainerized automobiles and cargo.

Among the impacted ports would be five of the 15 busiest in terms of North American container traffic, based on American Association of Port Authorities industry data for last year. They and their traffic ranks are New York/New Jersey, No. 3; Savannah, Ga., No. 4; Hampton Roads, Va., No. 8; Houston, No. 9; and Charleston, S.C., No. 13.

Because of the major role played by the container-shipping industry in U.S. corporate supply chains, government lobbyists and officials both have asked President Barack Obama to employ his authority under the Taft-Hartley Act to order a so-called cooling-off period of 80 days should the current dispute escalate to the point where either a lockout by management or a strike by labor appears imminent.

Matthew Shay, CEO and president of the National Retail Federation, presented his request for Obama's intervention in a letter, saying, "We call upon you to use all means necessary, including Taft-Hartley, to keep the two sides at the negotiating table and head off a coastwide strike."

Shay noted: "The recently resolved [eight]-day strike at the Ports of Los Angeles and Long Beach has impacted importers, exporters, and other transportation industries that depend on the ports. While the full impact of this disruption is still being calculated, one only needs to look at the 10-day lockout in 2002 that shut down all of the West Coast ports to see what kind of impact a coastwide strike could have. According to economists, the 2002 lockout led to lingering supply-chain disruptions and cost the U.S. economy $1 billion for each day of the lockout."

Florida Gov. Rick Scott also presented his request for Obama's intervention in a letter, with Reuters quoting him as saying, "The threat to national safety and security that would result from mass closure of ports cannot be overstated."

Scott pointed out: "The Taft-Hartley Act provides your administration with tools that can help avoid this threat. On behalf of the State of Florida, I respectfully request that you invoke the act when the contract ... expires at the end of the month."

Historically, Democratic presidents have been less likely and Republican presidents have been more likely to invoke their Taft-Hartley Act power to order a cooling-off period, so it would be interesting to observe Obama's reaction should push come to shove in this labor-management dispute next week.