Can USMX & ILA Change Labor Negotiations Hurting Shippers?

Remember the 2012/2013 ILA Strike Watch? Wouldn’t it be nice to never have one of those again?

Wouldn’t it be nice not to be trying to recover from the port slowdowns and congestion that happened during the West Coast labor negotiations?

There don’t have to be union slowdowns, lockouts, strikes, or strike threats every time a union contract expires at the ports.

However, all shippers know they’re in danger of large financial losses every time a labor union’s contract expires.

The East Coast ports made a move to change the current cycle of labor contract negotiations that is so costly to shippers.

Currently, U.S. East and Gulf Coast ports are benefiting from the recent contentious contract negotiations between the International Longshore & Warehouse Union (ILWU) and the Pacific Maritime Association (PMA) that exacerbated West Coast port congestion with union slowdowns and mini lockouts.

Shippers are diverting cargo from the West Coast to the East Coast in response to unreliability at West Coast ports that has been so costly to shippers during the ILWU contract negotiations.

Of course, it wasn’t long ago that shippers were diverting cargo from East and Gulf Coast ports because of strike threats from the International Longshoremen’s Association (ILA) during the union’s contract negotiations with the United States Maritime Alliance (USMX) at ports on that side of the country.

Shippers are fed up with suffering losses every time a union’s contract expires at U.S. ports.

The USMX and ILA are now making a strong move to bolster confidence in East and Gulf Coast ports while confidence in West Coast ports is at its lowest. This move may end the cycle of damaging shippers every time a union contract expires at U.S. ports.

Joseph Bonney reports in a Journal of Commerce (JOC) article that the USMX and ILA are planning to “open discussions” on a new, long-term contract at East and Gulf Coast ports over three years before the current labor contract expires.

The “open discussions” language is not exactly as strong as the words “starting negotiations” would be, but the idea that the union would be willing to start any kind of contract talks this far ahead of a contract expiring is extraordinary.

Traditionally, the ILWU or ILA would never allow a new contract to be reached before the previous one is expired. Slowdowns, strikes, and threats of strikes are the unions’ weapons for gaining leverage in contract negotiations. Negotiating a contract before the previous contract expires would be giving up those weapons.

When it was suggested back in December a change be made in the way negotiations are done, the ILA was absolute in its refusal to consider making the process less damaging to shippers at the cost of losing its most effective bargaining chips.

Here’s the highlight of the union’s response back in December from a JOC article:

“The answer is no,” [ILA President Harold] Daggett told JOC.com. “We’re going to continue to negotiate the way we negotiate now.”

Daggett said the right to strike is a union’s ultimate leverage in contract negotiations, and that the ILA wants to retain its right to use it in local negotiations.

That’s the typical attitude of the unions that we’ve seen over and over again in contract negotiations. The shippers, whose money and cargo create the jobs, and the U.S. economy are not concerns of the unions but possible hostages to increase leverage in contract talks.

However, for the first time, we are seeing a union say it is open to the idea of negotiating a contract before the previous one expires. JOC’s recent article reports the following on Daggett’s change of tune:

ILA spokesman James McNamara confirmed that the union’s president Harold Daggett, was “agreeable to engaging in conversations” about an early deal on a contract to follow the current six-year agreement, which expires Sept. 30, 2018.

I guess what the union is really saying is that they’re open to talking about negotiating an early deal, not that they’re actually willing to negotiate an early deal. But the way USMX characterizes both parties’ attitudes in the JOC article lends for more optimism to shippers.

“The goal of both parties is a long-term agreement that provides stability for the industry and for labor,” USMX Chief Executive David Adam said in an interview at the 15th annual TPM Conference in Long Beach, California.

USMX and the ILA want to begin preliminary discussions “sooner rather than later, probably in the next several weeks,” Adam told JOC.com.

These may just be timely PR words for East and Gulf Coast ports to boost their market share against the West Coast; however, reaching a long-term labor agreement that brings stability and confidence to shippers exporting and importing through East and Gulf Coast ports is in the best interest of the employers and workers at the ports.

I’d like to think this is a genuine act on the parts of the USMX and ILA to change the negotiating process that is so damaging to shippers and reach a long-term contract before the current one expires. Of course, I also wanted to believe the ILWU and PMA’s pledge to keep cargo moving during their contract negotiations.

Actions will speak louder than words.