Pressure on ports rises as deadline for labor deal looms
BY RON BRINSONIt’s down to the wire for the longshoremen’s labor talks that will determine if the Port of Charleston — and all major ports from Maine to Texas — will continue normal operations next Thursday.
Negotiators are hunkered down in New York with federal mediators, and by most accounts the talks have been strained, and at times stormy. Employers, represented by the U.S. Maritime Alliance (USMX), are determined to resolve an array of long-simmering work rules and compensation issues. And the International Longshoremen’s Association, led by its New York-based president, Harold Daggett, is driving hard bargains.
From the negotiating room Thursday night, Charleston’s ILA Local 1422 President Ken Riley described a ponderous process: “We’re making some progress, but at times it seems we’re moving backwards. There are so many issues, and we’re running out of time.”
The expiring contract goes back to 2004. It was extended for two years in 2010. Last September, with negotiations under the guns of Christmas shipments and a presidential campaign, the contract was extended to Dec. 29, and then again through Feb. 6.
Most observers agree that the parties are not interested in another kick of the can. There seems to be a mindset that it’s time to resolve nagging big-ticket issues once and for all.
Riley agrees, but he also predicts that if an agreement is close next Wednesday, the parties will consider every possible option for avoiding a stoppage. “Nobody wants a strike or any other stop-work action,” he said. “But we’re negotiating a six-year agreement. We have to get it right.”
Over the last half century, the maritime transportation industry has become the heavy-lifter for the global economy. Ships are bigger and faster. Ports are, too, with larger cranes and deeper channels. It’s been a march from cargo nets to containers, and the changes have always been about efficiencies and scalability.
In the longshoremen’s world, that invariably means lowering the demand for their services. And with fresh models of automated and robotic terminals operating in Europe, there’s good reason to expect that this parade toward lower human employment at ports has only just begun.
Union strike or employers’ lockout, any work stoppage would have an immediate economic price tag for South Carolina. Waterborne international trade is a strategic imperative for our state’s economy. The State Ports Authority says its operations generate a cumulative $45 billion annual statewide impact, with more than 260,000 Palmetto State jobs related to port functions.
That employment impact is concentrated in Greater Charleston, where the SPA says that more than 5,000 people are directly employed in overall Port of Charleston operations.
Charleston’s longshoremen are probably rooting for a reasonable no-stoppage settlement. From 2006 to 2010, ILA man-hours at Charleston declined by nearly 30 percent, or the equivalent of 250 full-time jobs. But work hours have been perking up lately as the Port of Charleston’s container volumes began steadily rising from its market position malaise.
Last month, “royalties” reportedly were the polemical issue in the New York negotiations. These payments started five decades ago when container ships began systematically to reduce longshore labor work hours. In 2011, royalty payments amounted to $211 million.
At Charleston last year, each qualified longshoreman earned about $23,000 in royalty payments, in addition to regular compensation of about $80,000 and a benefits package valued at about $40,000.
The USMX wants royalty payments capped and phased out over time. One big issue now is USMX’s demands for amended New York-New Jersey local work rules they consider archaic, including “no show” jobs. This touches President Daggett’s turf, and so far, the union has dug in its heels. Its leaders see this as a naked tactic to leverage the master contract with distinctly local New York-New Jersey issues.
There are reflections aplenty as we await the outcome of the USMX-ILA talks. The nation is fundamentally dependent on modern and efficient seaports. Ports are more efficient and they are about to become even more controlled by technology. The Panama Canal expansion will soon be reality and much larger container ships will sail into Charleston Harbor on channels deepened to 50 feet. The profitability of trucking companies and railroads and customs brokers and freight-forwarders and large and small shippers are hinged to the Port of Charleston.
But this large, complex and sophisticated muti-modal industry still depends upon the ship and cargo interface functions performed by humans. At seaport terminals, those humans are longshoremen, and the unrelenting application of technology and scalability has not touched the reality that they’re mighty important.Ron Brinson, a North Charleston city councilman and former associate editor of this newspaper, served as president/CEO of the American Association of Port Authorities 1979-86, and president/CEO of the Port of New Orleans 1986-2002. He can be reached at firstname.lastname@example.org.