ILA Contract Talks: Shippers braced for USEC disruption

posted Mar 8, 2012, 11:57 AM by Len James
SHIPPERS could divert cargo from US Gulf and east coast ports to Pacific gateways rather than risk being caught up in industrial action during forthcoming negotiations on a new labour contact.

Concern about the likelihood of disruption rose this week after a fiery speech from International Longshoremen’s Association (ILA) president Harold Daggett who made it clear that any one of four key major items on the negotiating table was a potential strike issue.

While other senior ILA executives pointed out that there had been no strike action for 35 years and that there was every reason to hope negotiations with the United States Maritime Alliance would reach a satisfactory outcome, the uncompromising stand taken by Mr Daggett nevertheless left transport managers fearing the worst.

“I think cargo will be diverted to west coast ports, although probably only temporarily,” one told Lloyd’s List. Others thought Mr Daggett was grandstanding and that the prospect of disruption was probably over-stated Negotiations on a new labour contract, which will start in Tampa later this month, are expected to be followed closely by the International Longshore and Warehouse Union which represents longshore workers in the west coast and whose current contract continues through until 2014.

However, west coast labour relations have been relatively cordial in recent years, with Peter Peyton, president of ILWU Local 63, promising Los Angeles and Long Beach terminal operators and shippers that “we will help companies and retailers make sure that this is the place where they want to do business.”

Relations are far more frosty on the other side of the country where the ILA has been provoked by a $7m compensation claim brought by the New York Shipping Association over a two day stopped that disrupted the port in 2010.

James Capo, chief executive of the United States Maritime Alliance who will be leading negotiations on behalf of employers, said he was “hopeful, even confident” that an agreement could be reached without any disruption to port operations.

He nevertheless acknowledged that there were a number of challenges to be resolved, including the application of new technologies.

But Mr Daggett appeared to leave little room for compromise on the issues he regards as central to the contract negotiations - jurisdiction, chassis, and container weights as well as automation.

Addressing the Trans Pacific Maritime conference in Long Beach, the ILA president spoke of the “dark clouds that hang over the ILA”, and in particular the lawsuit.

“When you are in a fight for your lives you tend to clench your fists and prepare to defend yourself. That’s where we are today,” he said. “We will not be bullied. There is nothing I would rather report than that the ILA and US Maritime Alliance are partners and see no problems ahead as we face the end of our current contract on September 30 This lawsuit expands the wedge between our two sides that could adversely affect any hope of harmony in the negotiations.”

Mr Daggett refused to rule out strikes but hinted that this could be selective, with the big companies singled out for industrial action with smaller lines spared.

He warned ocean carriers against using the issue of their poor financial results in negotiations with the union, saying that labour could not be blamed for their losses. Lines were the ones that ordered too many ships and then drove down freight rates, he told delegates. And the fact that they had resumed ordering suggested lines expected the market to pick up.

He described port automation as “a disaster for organised labour” and singled out Maersk for selling its chassis business to a private equity firm, with the potential loss of ILA jobs.

Mr Daggett will also be seeking an immediate crackdown on overweight containers that pose such a threat to port safety, with 12 ILA members killed last year in cargo-related accidents.

“It’s criminal that overweight containers that jeopardise the lives of anyone traveling our nation’s highways are allowed to leave our terminals,” he said.

Source: Lloyd's List, 7 Mar 12