ILA, ship management suspend talks to negotiate new contract at East, Gulf ports

Contract talks between bargaining committees of the International Longshoremen's Association (ILA) and East and Gulf Coast waterfront management collapsed yesterday. The suspension in talks cast fresh doubt over both sides' ability to negotiate a new six-year dockworkers' contract to replace the current pact before it expires Sept. 30.

In a combative statement, James A. Capo, chairman and CEO of the United States Maritime Alliance (USMX), which represents ship management, called the ILA's bargaining stand "uncompromising" and "contrary to the history of cooperation" that has marked the past 35 years of contract negotiations.

Capo charged the ILA with being unwilling to "have a meaningful discussion" about the need to change archaic work rules that thwart efforts to improve productivity and remove inefficiencies at the ports.

Capo singled out operations at the Port of New York and New Jersey, which employs more ILA members than the other 13 East and Gulf Coast ports combined. For example, work rules at the port pay some ILA members for 24 hours of work even if they are only on the job for a few hours a day, he charged.

At the Port of New York and New Jersey, one out of every three ILA members makes more than $208,000 a year in wages and benefits, according to the USMX statement. That figure doesn't include their portion of $232 million in annual "royalties"—or bonuses—received by dockworkers at all 13 ports based on the weight of containerized cargo.

ILA officials were unavailable for comment at press time.

The breakdown of talks comes a little more than a month after both sides reported meaningful progress on two key issues—the greater use of automation to replace manual functions at the docks and the continued jurisdiction of labor to repair and service chassis used by drayage companies.

Full-blown wage negotiations were tentatively scheduled for early September, the ILA said in an Aug. 2 posting on its website.

Retailers have become concerned over a possible work stoppage and have pressed both sides to reach an agreement well before Sept. 30. In the meantime, there have been discussions among importers to shift cargo deliveries from East to West Coast ports to avoid any service disruptions.

U.S. retailers generally order and ship their pre-holiday goods during the mid-summer period. Although a work stoppage would not affect the bulk of holiday traffic, it would still upend the normal flow of goods entering U.S. commerce as well as residual holiday traffic.

Brian Dodge, senior vice president of communications and state affairs for the Retail Industry Leaders Association (RILA), said in a July 20 e-mail that because shipping routes are generally determined when orders are placed, concerns about service issues will "reach peak urgency well before Sept. 30."