A statement by James A. Capo, chairman and CEO of the United States Maritime Alliance (USMX) which is engaged in contract negotiations with the International Longshoremen’s Association (ILA) said the ILA had taken an uncompromising stand which Capo characterized as “contrary to the history of cooperation that has characterized these negotiations in the past.”
The contract reportedly affects more than 14,500 ILA jobs with total wages of $1.04 billion (average total compensation of $124,138). The economic impact, compiled by independent sources, suggests another 550,000 directly related jobs are affected. And, when indirect jobs are added, the economic impact extends to two million total jobs with total wages of $98 billion (average wage of $49,000). In addition, the economic impact includes more than $11 billion in state and local taxes paid.
“Management’s primary goal in these negotiations is to maintain the competitive position and market share of the ports by improving productivity and removing the inefficiencies that threaten the economic viability of the ports. For example, they include antiquated work rules that have made 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 most expensive port in the world,” said Capo.
“Unfortunately, the ILA leadership has been unwilling to have a meaningful discussion about these archaic practices, among them “low-show” jobs that pay some ILA members for 24 hours of work even if they are only on the job for a few hours a day.
“ILA workers are among the most highly compensated workers in the country, on average receiving $124,138 a year in wages and benefits, which puts them ahead of all but 2 percent of all U.S. workers. They earn an average hourly wage of $50, more than double the $23.19 average for all U.S. union workers. They also pay no premiums and minimal co-pays and deductibles for a healthcare plan that is better than most U.S. employers provide their workers,” Capo continued.
“At the Port of New York and New Jersey, 34 ILA members make over $368,000 a year in wages and benefits; one of every three makes over $208,000 a year - not including annual bonuses based on the weight of container cargo. These “container royalties” totaled $232 million in 2011 – or an average of $15,500 for ILA workers on the East and Gulf coasts.”
Capo said, “USMX and its members stand ready to engage in substantive negotiations with the ILA over these important issues and to reach an agreement on a new contract that addresses the challenges we face, preserves thousands of good jobs and, in the end, is fair to both sides. We urge the ILA leadership to make the same commitment.”
Freight forwarder A.N. Deringer cautioned customers, “The ILA plans to ask USMX to make a final offer for the union's consideration, which the ILA anticipates its members will reject--making a strike likely.” Deringer noted, “Recently, the ILA affiliated with the International Dockworkers Council, and the ILA anticipates dockworkers affiliated with this union in other countries will support an ILA strike.”
Deringer continued, “A strike would shut down all U.S. East and Gulf Coast ports. Asian cargo bound for the East Coast would be diverted to West Coast ports causing long port and rail delays. In addition, containers coming from Europe, the Mediterranean, and most of South Asia would be nearly shut out. Some carriers may elect to go to Canadian ports, but there would likely be a long backlog at those ports as they juggle port handling and ship loading capacity concerns.”
Jon Gold, vice president, Supply Chain and Customs Policy at the National Retail Federation, commented simply, “We urge both sides to come back to the table and continue negotiations on a new contract before the current contract expires in September. This needs to be done without disruptions to the supply chain impacting the movement of the cargo through the ports, especially as we enter the critical peak season for holiday merchandise. The impact from a strike or shutdown of the ports would be devastating for the economy as witnessed by the impact of the 2002 West Coast lockout."