What’s the current status of the negotiations?
The ILA and USMX reached a tentative agreement on a six-year Master Contract on Feb. 1. The agreement, announced by Federal Mediation and Conciliation Service Director George H. Cohen, removed the immediate threat of any disruption of operations at the East Coast and Gulf Coast ports. It is subject to formal ratification by members of the ILA and USMX and to the successful conclusion of negotiations on local contracts.
What's the recent history of contract negotiations with the ILA?
Since 1977 the United States Maritime Alliance, Ltd. (USMX) and its predecessor organizations have successfully negotiated contracts with the International Longshoremen’s Association, AFL-CIO (ILA) without any disruptions to service. This year it is imperative that we do the same. East and Gulf Coast ports support hundreds of thousands of jobs and are crucial to both national and local economies.
Why is this important?
The longshore industry plays a vital role in the flow of international trade and commerce, the lifeblood of the U.S. economy. In 2011, millions of containers passed through our ports. They carried more than 110 million tons of import and export cargo, accounting for 95 percent of all containerized shipments from Maine to Texas.
The 14 ports on the East and Gulf of Mexico Coasts alone support more than 14,500 jobs for ILA members and more than a half a million additional jobs directly related to the shipping industry. In all, the industry generates economic activity that accounts for more than two million jobs, $98 billion in wages and $11 billion in state and local tax revenue.
What is the timeline for contract negotiations?
USMX and ILA started joint contract negotiations on March 29, 2012. On February 1, 2013, the two sides reached an agreement on a new six-year Master Contract. The agreement is subject to formal ratification and to the successful conclusion of negotiations on local contracts.
What are USMX’s main priorities during the contract negotiations?
USMX’s goal in the current bargaining round is to protect the industry’s market share and its ability to compete in a global economy. To achieve this, management must maintain its ability to introduce new technology that will increase the capacity of the ports, attract new capital, and promote growth. Growth is the best guarantee of jobs.
Management must also examine the industry’s current cost structures. We have to address restrictive and redundant work rules, manning practices and other cost impediments, some of which go back as far as the breakbulk days, and negatively affect our global competitive posture.
Another focus is on enhancing safety through training and continued emphasis on drug and alcohol testing programs. All of these efforts are geared toward accident prevention, the key to any successful safety program.
What is the issue with container royalties?
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.
Are employers trying to eliminate container royalties?
No. Management has proposed only capping the payments and using the excess, not as savings for employers, but to help pay for other benefits for ILA workers.
How many employees does this contract impact?
There are more than 14,500 employees in the East and Gulf Coast longshore industry represented by the ILA.
What does the Master Contract currently include?
Longshore workers have a superior wage and benefits package that places them among the top-paid union workers in the U.S. The estimated total cost of the Master Contract in its final year ending September 30, 2012 is $1.8 billion. ILA members on the East and Gulf Coasts earn an average of $124,000 annually in wages and benefits. Management covers 97 percent of the cost of a healthcare plan for both active and retired longshore workers and their dependents.
Does this contract include ports on the West Coast, too?
West Coast ports and employees are represented by a separate Master Contract and different organizations. The Master Contract that USMX and ILA are negotiating includes the 14 ports on the East and Gulf of Mexico Coasts covering more than 14,500 jobs filled by ILA members.