Possible strike, supply chain disruption looming for 15 ports including Port Everglades if no agreement reached by Dec 30
On Thursday, December 27, Governor Rick Scott will hold a conference call with Florida port leaders to discuss the importance of Florida’s ports during the ongoing negotiations between the International Longshoremen’s Association (ILA) and the United States Maritime Alliance (USMX) regarding their contract, which is set to expire Saturday, December 29th. Governor Scott sent a letter to President Obama last week asking him to invoke the Taft-Hartley Act (Learn more about this act here: http://en.wikipedia.org/wiki/Taft%E2%80%93Hartley_Act) to prevent a possible work stoppage that could shut down ports if no agreement is reached between the two groups before the contract expires Saturday. The ILA is calling for a coast-wide strike and you can see comments on their preparations here: http://www.ilaunion.org/pdf/StrikePreparations.pdf.
Port Everglades in Fort Lauderdale is one of 15 ports that could be impacted by a strike from the International Longshoremen’s Association which is disagreeing with USMX on several contract items.The Federal Mediation and Conciliation Service (FMCS) is now involved according to this government press release sent out Christmas Eve. Port Everglades is critical to South Florida’s industry and is key to imports and tourism and the goal of the mediation is to prevent a major disruption in the supply chain. The Port of Miami and the Jacksonville Port Authority could also be impacted if a federal mediator is not successful.
“FMCS Director George Cohen has called a meeting of the ILA and the Maritime Alliance in advance of the December 29th expiration of the contract extension. The parties have agreed to attend. Due to the sensitive nature of the negotiations FMCS will have no additional comment at this time,” reads the FMCS press release.
According to the release, the Federal Mediation and Conciliation Service, created in 1947, is an independent U.S. government agency whose mission is to preserve and promote labor-management peace and cooperation. Headquartered in Washington, DC, with 10 district offices and 67 field offices, the agency provides mediation and conflict resolution services to industry, government agencies and communities.
The United States Maritime Alliance, Ltd. (USMX) represents employers of the East and Gulf Coast longshore industry. Membership consists of 24 container carrier members, including the 10 largest carriers worldwide, and every major marine terminal operator and port association on the East and Gulf Coasts. USMX’s members are responsible for the transportation and handling of cargo shipped to and from the United States. USMX highlights their positio non potential impacts from a strike here, primarily the financial impacts of a shutdown: http://usmxlaborupdates.com/news-and-updates/to-avoid-strike-both-sides-should-commit-to-reaching-agreement/.
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The following comments on the issues is from the International Longshoremen’s Association’s website: http://www.ilaunion.org/news_Contract_Issues.html
THE ISSUE: CONTAINER ROYALTY
International Longshoremen’s Association, AFL-CIO wants to maintain Container Royalty Fund as it is in current contract. USMX, the employer group representing ILA employers, wants to put a cash ceiling or CAP on how much money is put into the Container Royalty Fund for current longshore workers and ultimately, eliminate the Container Royalty Fund.
The first container royalties were established in the 1960s as a way to protect members of the International Longshoremen’s Association, AFL-CIO (ILA) in New York from job losses created by containerization and its introduction of automated cargo.
Container Royalty came about from negotiations and sacrifices made by ILA members since the late 1960s. Container Royalty supplements the members’ income and keeps his benefits package financially strong. Container Royalty eligibility must be earned by an ILA member reaching a certain amount of hours worked each year. ILA work isn’t like other professions: no ships mean no work, but employers depend on a strong and skilled workforce when ships need to be worked. Container Royalty helps keep an ILA workforce available.
When containerization started the ILA was faced with a huge displacement of worker whose jobs were eliminated by the ominous steel boxes. The ILA was at a crossroad – allow containerization to be implemented or refuse. The ILA agreed to allow containerization to flourish but negotiated a fee based on the weight of each loaded container to be used for annual payments to the longshore workers whose job opportunities had been compromised due to containerization. As the number of containers being handled increased, the negotiated payment for each worker increased. Rather than being an annual bonus for each worker, as USMX suggests, this payment is compensation for the job opportunities lost by permitting containerization.
United States Maritime Alliance now wants to limit the amount of money that is paid ILA members and goes into various Container Royalty Funds by placing a CAP on the money collected in any given contract year. Container Royalty is collected by the amount of tons of containerized cargo ILA members handle. A total of $4.85 is collected on each ton of containerized cargo handled and is distributed to ILA workers as part of a Wage supplement and to the ILA members’ health care fund, called MILA.
USMX ultimate goal is to eliminate Container Royalty, based on their last proposal to end it in 25 years.
ILA has suggested a way for Container Royalty to end now. If the Carriers don’t want to pay Container Royalty, then bring back all the warehouses, and start stuffing and stripping again. A Carrier does not have to pay Container Royalty on a Container that has been stuffed and stripped by the ILA.
Automation continues to reduce the number of hours for hard working ILA members. Container Royalty wage supplements are more important today for ILA members than its ever been to keep America’s commerce moving with skilled, trained longshore workers.
ILA and USMX have exchanged proposals and demands regarding on Wages based on a tentative six-year contract. The ILA has put in its demands wage increases that are reasonable and would enable our employers to remain competitive.
In its contract proposals to the ILA, USMX continues to treat ILA workers like second-class citizens. In all its public pronouncements on wages, USMX fails to note that longshore labor cost amounts to between 3% and 4% of the shipper’s total cost. Unlike other hourly workers who work a 40-hour workweek, most longshore workers make themselves available for work on a daily basis. Early on, the ILA negotiated a guarantee of a day’s pay. Otherwise, the employer had no obligation to pay if a vessel did not arrive on schedule. To the employer’s benefit, Guarantee Annual Income no longer exists.
Also very important to note: For over 20 years, our employers enjoyed paying tiered wages where newer longshore workers were paid much less than their senior counterparts. The system was unfair and there was never light at the end of the tunnel. History shows that management enjoyed huge savings while ILA members, their locals, the Districts and the International all suffered with reduced revenues.
ILA HEALTH CARE FOR WORKERS:
The ILA’s National Health care program is called “MILA”
Part of MILA is funded through Container Royalty money mentioned earlier.
USMX current proposal is that our MILA fund is so solvent that they’d like to defer payment of CR 4 for two years.
USMX views this as a loan, promising to pay it back within third year of agreement. Their math is fuzzy. They claim CR 4 contributions down the road will be greater than the current $1.15. We think their contributions would end up being less with even a 5% bump in container growth.
USMX pledged early in negotiations that no matter what we agreed to with MILA, our fund would be sound and secure because they’d automatically pump money into the fund if the current $800 million reserve were to fall below $600 million. They called it a trigger and that it would kick in when the fund went below $600 million. CR-4 would restart.
Somehow, talk of a “trigger” has stopped. Their new formula? They only want a 6-month reserve with no trigger. That formula would take our current $800 million reserve down to the $200 million mark.
They will “Guarantee” the current benefit for the life of the contract if we agree to that two-year deferred payment to CR-4. The ILA asks “What reserve will we have at the end of a contract with this formula?” We are unsure about the impact from OBAMACARE.
ILA refuses to jeopardize the future of our MILA program by shortsighted decisions. Healthcare is extremely important to our members and their families and we want it financially secure.
ILA and USMX did reach tentative agreements on automation and container chassis work and on some jurisdiction language.
All local issues and negotiated in the local port area. All ILA ports from Maine to Texas still need to resolve local agreements.
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