BY RON BRINSON
It’s crunch time for negotiations on a new contract covering longshore union operations at 14 East Coast and Gulf Coast ports. The current master agreement expires Sept. 30.
Encouraging signs from the negotiating table a month ago have now devolved into a feisty stalemate. One New York International Longshoremen’s Association (ILA) local has authorized a strike.
So there’ll be a new contract by month’s end, or we Americans will get a refresher course on just how important ships, ports and longshoremen are to the national economy.
And the lessons are bound to be painful.
Caught in the crossfire are the major ports from Maine to Texas, which handle more than 100 million tons of cargo and an estimated 95 percent of ocean-borne cargo containers.
That, of course, includes Charleston, its private-sector maritime service industry — and its customers.
The National Retail Federation reports that major retail shippers already are acting to protect their supply chains with alternative routing via West Coast ports. Some are accelerating shipments in advance of a possible work stoppage and stockpiling inventories. The bottom line for the retail industry: A longshore work stoppage would devastate the norms of retail logistics just as Christmas season inventory shipping peaks. This upset would add significant new costs to the flow of retail commerce and point-of-sale pricing.
But this is not just about Christmas and the retail industry. The National Industrial League predicts “dire consequences that would impact the nation’s freight system and economy.”
The South Carolina economy is particularly exposed. The Spartanburg-Greenville BMW plant, for example, produces about 1,150 units each day; about 800 of those are shipped by train to the Columbus Street terminal for export to international markets. Any interruption in this fine-tuned delivery process will create costly impacts for BMW and for its South Carolina-based suppliers.
The U.S. Maritime Alliance (USMX) represents ocean carriers and stevedoring companies, and its CEO James Capo said he is hopeful a work stoppage can be avoided.
But the last negotiation session in Delray Beach, Fla., ended about the time it started. There was earlier progress on key issues of automation and union jurisdiction in beyond-terminal work, such as chassis maintenance and repair.
But Capo and the USMX team introduced what the union considered “local” issues to the master contract. “We have certain issues that are important to management ... pay practices, archaic work rules. We have to address those and they (union leaders) are not willing to do that,” Capo said in an interview with American Shipper magazine. “That is what broke these negotiations apart, their unwillingness to discuss those things we need to talk about.”
But ILA leaders saw a bold attempt to leverage the master contract with local issues, most of which relate to New York. The meeting which began with hopeful promise ended abruptly.
Charleston’s ILA Local 1422 President Ken Riley was there and says he “was as surprised as everybody else” that the tone changed so quickly. “Master contract talks historically addressed only issues that are common to every port area from Maine to Texas,” he said.
Riley now believes the USMX tactic establishes “... a much higher hurdle to cross if a contract is to be reached by the end of September. Until these items are removed from the table and addressed in the proper forum, I believe contract talks will continue to stall.”
ILA President Harold Daggett seemed livid. Shortly after he returned to New York, his local union voted to authorize a strike.
There have been no major ILA work stoppages since 1977, remarkable given that the march of efficiency within the marine logistics industry almost always means lowering demands for labor.
The nation got a taste of the downsides of longshore labor stoppage in the 2002 “lockout” of International Longshore and Warehouse Union workers at 29 West Coast ports. That lasted 11 days and reminded shippers and consumers that longshoremen and their unions can’t be taken for granted. But the larger lesson of the 2002 experience is that any interruptions in U.S. port operations quickly affect the national economy.
The Federal Reserve estimated that in the 10th day of the West Coast stoppage a decade ago, the U.S. economy was taking a daily $2 billion hit.
President George W. Bush effectively ended the 2002 lockout by engaging the national interest levers of the Taft Hartley Act and forcing negotiations to resume.
Federal meditators are now involved in the USMA-ILA negotiations, and fresh talks are supposed to take place the week of Sept. 17.
That would leave only two weeks for agreement, but leaders on both sides are sounding guardedly hopeful.
The national economy can ill afford what would be a dramatic hit, one that would surely harm the South Carolina economy.
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.