No contract in sight as ILA, management conclude three days of talks

The International Longshoremen's Association (ILA) and ship management representing 14 U.S. ports, facing a Feb. 6 deadline to consummate a new labor contract, met for three days this week without reaching an agreement, a federal mediator supervising the talks said today.

In a statement, George H. Cohen, director of the Federal Mediation and Conciliation Service, said talks "made progress" and that both sides have agreed to continue discussions under the agency's auspices. He declined further comment.

On Dec. 28, the ILA and United States Maritime Alliance (USMX), which represents management at ports from Maine to Texas where 14,500 union members work, extended their current contract until Feb. 6. Both sides agreed to this extension so they could try to resolve differences that nearly led to a strike on Dec. 30, the day after the prior contract extension was set to expire.

Efforts to reach a master, or "coastwide," agreement, hit a possible snag earlier this month after ILA representatives walked out of talks over a local contract with the New York Shipping Association (NYSA), the ship management association for the Port Authority of New York and New Jersey. Failure to reach a local contract agreement could shut down the complex, which employs 3,300 ILA members and is the nations' third busiest port.

The master agreement addresses wages and benefits for the longshoremen working at the 14 ports. A local contract deals with issues specific to an individual port, such as work rules. It is unclear if ILA President Harold Daggett would allow a vote on the master contract until all of the local contracts are finalized.

The master contract dispute, which has dragged on for months, came to a head in the early fall when the original contract was set to expire on Sept. 30. A Sept. 20 agreement, which came during the pre-holiday, "peak shipping" season, extended the contract for slightly more than 90 days and averted a potential supply chain disruption.

On Dec. 18, both sides broke off contract talks, leading many to believe that a Dec. 30 work stoppage was inevitable. A last-minute agreement extended the contract until Feb. 6.

The overriding issue has been the status of the annual royalties paid to each ILA member based on the revenue generated by container shipping at the 14 ports. The royalty formula was established in 1960 to protect union workers in New York from job losses stemming from the introduction of containerization and cargo automation practices. Royalty payments averaged $15,500 in 2011 for each ILA member working at the 14 East and Gulf Coast ports, according to management.

USMX has proposed to keep royalties at 2011 levels—estimated at $211 million—for current recipients for 25 years or until they leave the industry, whichever occurs first. However, new employees would not be eligible to receive any payments. The ILA opposes any change in the formula and has repeatedly asked management to take the issue off the bargaining table.