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Shipping lines: No easy fix for Charleston port's labor problem at new terminal

Yorktown Express (copy)

Hapag-Lloyd has been the only major ocean carrier to use the new Leatherman Terminal in North Charleston amid a labor dispute between union dockworkers and the State Ports Authority. English Purcell/State Ports Authority/Provided

ISLE OF PALMS — It's going to take more than a legal opinion to get shipping lines to call on the Leatherman Terminal, the top North American bosses at two major ocean carriers said Oct. 19 during the South Carolina International Trade Conference.

A labor dispute between the State Ports Authority and the union that represents dockworkers has kept most shipping lines from using the new terminal in North Charleston. Although a judge for the National Labor Relations Board ruled Sept. 16 in favor of the SPA, the companies that move containers aboard megaships visiting the Port of Charleston want a more definitive answer.

"To me, it comes down to having a formal agreement between the parties on the terms of labor and how they operate in the terminal," said Uffe Ostergaard, president of Hapag-Lloyd America. "That is still pending, despite the fact that the (union's) claim was rejected. That's what needs to be formalized."

Narin Phol, regional managing director for Maersk North America, added he doesn't believe the issue has been resolved to the point where the Danish shipping giant — the port's biggest customer — would be willing to use the terminal. He said the SPA's Wando Welch Terminal in Mount Pleasant has enough capacity to meet his company's needs.

The labor dispute centers around who will operate the cranes and heavy-lift equipment at the $1 billion first phase of the Leatherman Terminal. The SPA wants its employees to run the machinery. The International Longshoremen's Association said its contract with shipping lines calls for union workers to operate the cranes.

The labor board's judge ruled in favor of the SPA, but the union has asked for an additional 30 days to file an appeal that would be heard by a five-member board appointed by the president.

Jim Newsome, president and CEO of the State Ports Authority, said he is talking with union leaders about finding a way to end the impasse.

"We need to find some type of agreement. I'm not sure what that looks like or if it has to be written," he said. "You can be sure it's my top priority."

ILA spokesman Jim McNamara did not respond to a request for comment Tuesday.

The union is counting on a more pro-labor NLRB under President Joe Biden, who has appointed two members to the board. Those members, along with an appointee by former President Barack Obama, give the board a Democrat majority, which is seen as being more favorable to organized labor.

Hapag-Lloyd is the only major carrier to use Leatherman since the first phase of the terminal opened in April, sending its weekly North European service of mostly small- to mid-sized containerships to the site. Ostergaard said Hapag-Lloyd won't send any other vessels to the site until the line is convinced the labor dispute is fully resolved.

"I feel confident there will be a meeting of minds to resolve that and get the asset activated," he said.

It could be a while before that happens. If the labor board hears the union's appeal, it could take months to rule on the matter. And getting the type of written agreement between the SPA, the union and shipping lines that would give Ostergaard and others the comfort they're seeking could take months longer.

"The terminal is very nice and very well-equipped," Osgtergaard said. "It's a pity that you have that sort of state-of-the-art asset sitting there in a market where everything is clogged up and you can't use it because of disputes on labor issues that have, at least from what I've always experienced, always run well here in Charleston."

Just 28,246 containers of all sizes moved through the Leatherman during the first three months of fiscal 2022, which started July 1. The terminal’s first phase has capacity for 700,000 containers a year.

With a record influx of retail-related cargo and a broken global supply chain, Newsome of the SPA said Leatherman is needed now more than ever.

“There’s no sense to have underutilized capacity today when the supply chain is taxed as it is in other places,” he said.

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Reach David Wren at 843-937-5550 or on Twitter at @David_Wren_

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