SHIPPING: Union, US ports negotiations stalled with contract expiration just 26 days away

HOUSTON (ICIS)–The collectively bargained contract between US East Coast and US Gulf ports and dock workers expires at the end of the month and the parties are not currently negotiating, leading one of the nation’s largest retail trade groups to urge the government to get involved.

Last week, both parties submitted documents with the US Federal Mediation and Conciliation Service (FMCS) informing the agency of a dispute between the parties, as required by law.

About 14,500 dock workers are represented by the International Longshoremen’s Association (ILA), while the 36 ports – including three of the busiest ports in the US in Houston, New York and New Jersey, and Savannah, Georgia – are represented by the United States Maritime Alliance (USMX).

The looming work stoppage would have major impacts on the US economy, and the National Retail Federation (NRF) has urged both sides to resume negotiations.

“At a time when inflation is on the downward trend, a strike or other disruption would significantly impact retailers, consumers and the economy,” NRF President and CEO Matthew Shay said. “The administration needs to offer any and all support to get the parties back to the table to negotiate a new contract.”

In June, NRF led a coalition of 158 state and federal trade associations in a letter to President Joe Biden urging the administration to work with the negotiating parties to reach a new agreement.

The NRF said that the threat of a strike during the peak shipping season has many retailers already implementing costly mitigation strategies, such as shifting deliveries to West Coast ports.

This adds additional costs because of the longer routes, which could be even more drastic as capacity for ocean carriers is already tight because of diversions away from the Suez Canal and Red Sea.

USMX said in a statement on its website that it is seeking a return to the bargaining table.

“USMX has still been unable to secure a meeting with the ILA to resume negotiations on a new master contract,” according to the statement. “USMX continues to meet with its members in preparation for the resumption of negotiations, and it remains committed to working with the ILA leadership on a new agreement.”

The ILA is holding Wage Scale Committee meetings today and tomorrow in Teaneck, New Jersey, and union president Harold Daggett insists the union will strike at 00:01 Eastern Time on 1 October if a deal is not reached.

“There is a real chance we will not have an agreement in place,” Harold Daggett said in a video shared on the ILA website.

“The ILA will definitely hit the streets on 1 October if we do not get the kind of contract we deserve,” Daggett said.

Dennis Daggett, ILA executive vice president, said in the video that the two sides are at an impasse and cannot even get past the economics of a new contract.

Other issues that the ILA cites as deal-breakers are container royalty (special payments to compensate longshoremen for decreased employment opportunities resulting from the use of containerized shipping), better healthcare benefits, and a ban on all automated and semi-automated services at the ports.

Dennis Daggett said the ILA has been working through local agreements between locals and individual ports before focusing on the overall agreement and still has some items to work out at the local level, including Mobile, Alabama, and Jacksonville and Tampa, Florida.

Market participants have said a strike by dockworkers would not have much of an impact on liquid chemical tankers.

One reason is that most terminals that handle liquid chemical tankers are privately owned and do not necessarily use union labor.

Also, tankers do not require as much labor as container or dry cargo vessels, which must be loaded and unloaded with cranes and require labor for forklifts and trucks.

But more liquid chemicals are being moved on container ships in isotanks.

Focus story by Adam Yanelli

Visit the ICIS Logistics – impact on chemicals and energy topic page