International Longshoremen's Association President Harold Daggett, whose union will begin negotiating a new contract later this month, warned of a possible strike if demands aren't met in several areas, including automation.
Daggett made his comments Tuesday at the annual Journal of Commerce
-sponsored Transpacific Maritime Conference in Long Beach, Calif., when he appeared on a panel discussion with other members of the ILA leadership and James Capo, the chairman and chief executive officer of USMX, the group that represents liner carriers and stevedoring companies.
“I expect our negotiations to take long, hard looks at four important areas to ILA members: new technology and automation, jurisdiction, chassis, container weights.”
He added automation would be the toughest issue to negotiate, saying “introduction of new technology and automation at a port terminal can, if left unchecked, be a disaster for organized labor.”
“We know technology is coming and we know we can’t stop it forever, but we will not be deterred from protecting our work and our jurisdiction,” he said.
Daggett said he was willing to work with management to allow facilities to be automated, pointing to an agreement he reached years ago with Maher Terminals that allowed it to install cameras and scanners at gatehouses in the Port of New York and New Jersey. Daggett said Maher guaranteed existing workers would keep their jobs, and if they died or retired, their positions would be filled with other ILA workers.
“If you work on that kind of line, you don’t have a problem with the ILA, because now you are bringing us along,” he said.
But he added “if you think you are going to bring in fully automated piers like they have in Rotterdam or in Liverpool, you wiped out all the longshoremen locals over there. That ain’t going to happen here on the East Coast. We are not going to stand for it. That is definitely going to be a strike issue, those four items I read off. We are willing to work with you, but you have to work with us too."
Capo tried to reassure shippers and transportation executives in the audience, saying he was “hopeful, maybe even confident that we will be able to reach an agreement without any disruption,” noting that union and management have been able to negotiate contracts without any service disruption for 35 years.
“We don’t intend to have a strike,” said Benny Holland Jr., the ILA's executive vice president. “But if we are pushed to the hilt, we have no choice but to. I can tell you now it is our intention to keep moving that cargo from the manufacturer to the consignee and consumer…. I don’t want anyone leaving here thinking they need to divert their cargo.”
An agreement was important, Capo said “because it keeps ILA members working, terminals and ports operating and most importantly the cargo pipeline growing.”
Capo said his members need to protect the ability of shippers to compete in the global economy, and technology allows terminals to attract capital for investment.
“At the end of the day, growth is the best guarantee of jobs,” he added.
Capo said he expected negotiations to examine industry cost structures, including restrictive and redundant work rules, manning practices and other cost impediments—some of which go back to breakbulk days—that hurt our comparative cost.”
He admitted some customers “are very nervous, I have spent the last four or five months out talking to a lot of people. At least calm them down. They have to recognize this process takes time. We would certainly not like to drive off business. We have the best contract in the world.”
“We can have the best contract in the world, but if we have automation, that contract means absolutely bull--- you know what,” Daggett retorted.
“When we get into negotiations, I’m one for a selective strike, and I’ll tell you what that means,” Daggett explained. “Any shipper who feels that they are in favor of what we are talking about and wants to work with the ILA, and the ones that don’t—you know what is going to happen.”
Daggett said he was not threatening a strike, but that “we’ve got four hurdles to jump over.”
Saying he has heard a lot of “doom and gloom” from carriers, Daggett said “as we go forward in our negotiations with USMX, both parties need to look forward to a growing economy in the United States.”
He said carrier losses last year were “not due to excessive labor costs at U.S. terminals,” but from overcapacity and “devastating price competition” among carriers “to increase individual market share resulting in unprofitable freight rates.”
Daggett also indicated the ILA will insist on keeping jurisdiction over repair work on chassis and containers, even as some shipping companies are beginning to reduce their involvement in the chassis business.
“Who the hell gives them the right to say they are getting out of the chassis business when we had it from the inception. In our contract we have the right to follow our work,” he said.
Pointing to the recent announcement by Maersk Line that it was selling its Direct ChassisLink to the investment firm Littlejohn & Co., Daggett said “Big Harold was not pleased to read about Littlejohn. I’m sure Big Bob McEllrath, my friend and ILWU (the West Coast International Longshore and Warehouse Union) president, wasn’t happy to read about it either.”
Daggett said he wants Littlejohn to be a signatory to the USMX contract or hire an ILA contract.
“We are not going to let chassis pools take our work from our terminals that we have had from the beginning and think they can pick up any time they want and leave,” he said.
Daggett also complained about a $7 million lawsuit brought against the ILA by the New York Shipping Association, after a wildcat strike shut down terminals in New York and Philadelphia in 2010 after Del Monte Fruit pulled out of a Camden terminal and went to a non-ILA dock.
“When situations around you place you in a fight for your lives, you tend to clench your fist a bit tighter and prepare to defend yourself,” Daggett said. “That’s where we are today. We will not be bullied.”
He said the lawsuit “continues to expand a wedge between our two sides that could adversely affect any hope of harmony in negotiations.”
Daggett said he was “gravely concerned about the overweight container problem,” saying an ILA study found vessel manifest weights are underreported by an average of 26 percent versus the actual import container weight.
He wants technology installed on cranes so inbound containers can be weighed as they are lifted off ships.
In addition to improving safety, Daggett said the container issue is important because ILA receives “container royalty funds that support members’ health care plans and other benefits are funded based upon inbound container tonnage. Assuming a 26 percent overweight factor, that amounts to over a $100 million shortfall in a typical year.” — Chris Dupin