ILA & USMX to Reopen Negotiations

Photo By: Cpl. Wesley Timm

There’s good news for shippers and the supply chain. The International Longshoremen’s Association (ILA) and the United States Maritime Alliance (USMX) are resuming labor contract negotiations for the East and Gulf Coast ports.

Chris Dupin reports in an American Shipper article:

The International Longshoremen’s Association (ILA) and the United States Maritime Alliance (USMX) revealed Friday they are resuming master contract negotiations, with the goal of finalizing terms on a contract that will keep cargo moving at Atlantic and Gulf Coast ports.

Their current contract expires Sept. 30, 2018.

September 30th may seem a long ways off to some, but it’s close enough for importers and exporters who ship through East and Gulf ports to be nervous. Especially worrying is the fact that automation is expected to make these negotiations contentious.

In fact, when negotiations were last happening a few months ago, in December, talks broke down over automation. Hailey Desormeaux reported in American Shipper at the time:

Negotiations on a new contract between the International Longshoremen’s Association (ILA), which represents dockworkers at East and Gulf Coast ports, and the United States Maritime Alliance (USMX) abruptly broke off Wednesday over a disagreement regarding automation, according to a report from the Journal of Commerce (JOC).

…

On Wednesday, [ILA President Harold] Daggett reportedly accused employers of seeking to use automation to eliminate dockworker jobs. Daggett noted the ILA and USMX did not agree on the distinction between fully automated terminals and semi-automated terminals that have automated features but are operated by dockworkers.

“When they’re talking about fully automated, they mean two or three people on the whole terminal,” he told JOC. “We’re not going to accept that. If they install a computer on any equipment, they need to provide a seat for a longshoreman next to it.”

There are still months for ILA and USMX to come to terms on a contract extension or new one before the current contract expires. However, shippers and supply chain professionals don’t have to think back very far to remember the union’s chokehold on the supply chain during the ILA strike watch of 2012-2013 when contentious negotiations stretched well past the expiration of the previous contract and the union announced plans to strike.

Then in 2014-2015, came contentious contract negotiations at West Coast ports between the International Longshore & Warehouse Union (ILWU) and the Pacific Maritime Association (PMA). It took over a year for the ILWU and PMA to get a new contract worked out, with hugely costly labor slowdowns, mini-lockouts, and crippling port congestion happening as part of the process.

And those things really have been part of the process.

Traditionally, dockworker unions do not extend or agree to new contracts before the previous one expires. Making such an early agreement would take away the unions’ most powerful weapons of leverage—strikes, threat of strikes, and slowdowns. Of course, shippers and the U.S. economy end up suffering loss over the way contracts are traditionally negotiated at the ports.

Shippers were given a glimmer of hope from the USMX and ILA that the damaging cycle of contract negotiations might change in 2015. After East and Gulf Coast ports received a market share boost from the instability at West Coast ports, the USMX and ILA announced they planned to open early talks for a long-term labor contract extension to bring stability to the East and Gulf Coast ports.

The cynical part of me at the time wrote that the ILA and USMX’s talk of early negotiations might just be PR words to capitalize on shippers’ anger and distrust of the ILWU and PMA immediately following losses suffered because of the 2014-2015 contract negotiations. Three years later, that cynical part of me seems to be right.

Ironically, the welcome talk of an early extension negotiation from the USMX and ILA may have turned shippers in favor of West Coast ports instead of East and Gulf Coast ports. While the USMX failed to come together on an early contract extension, the ILWU agreed in August of last year to extend their contract years ahead of its expiration.

That puts pressure on the ILA and USMX to do likewise. Unfortunately, Daggett said the ILA is prepared to avoid bargaining until the contract expires (as per usual) according to Desormeaux’s article about the negotiations breaking down in December. Let’s just hope the ILA follows ILWU’s example and gets these negotiations done before that.