The nation’s largest shipper group, the National Industrial Transportation League, is asking President Obama to take action in the event of a work stoppage at East and Gulf coast ports later this month.
The International Longshoremen’s Association and their employers, represented by the U.S. Maritime Alliance (USMX), met for three days this week in Florida without coming up with a contract to replace the one that expires on Dec. 29. They will meet again next Tuesday for further talks about container royalty charges.
USMX said earlier this year it wanted to cap royalty payments "and use the excess, not as savings for employers but to help pay for other benefits for ILA workers," but ILA President Harold Daggett does not want a cap, so members receive maximum container royalty payments.
In a letter sent Thursday afternoon to Obama, the NIT League said “If a new labor agreement is not reached and a port shutdown occurs, we respectfully ask you to be prepared to immediately put into place measures within your authority to continue operations and services while more time is secured to reach an agreement through collective bargaining. As a nation, we cannot afford the consequences of protracted port closures.”
Bruce J. Carlton, president and chief executive officer of the NIT League, told Obama “we respect the process of collective bargaining. However, the likelihood of port closures on both coasts increased significantly when the ILA voted to authorize strike action should an agreement not be reached when the current contract expires on December 29, 2012.” The strike vote occurred on Monday.
That vote, Carlton said “raises a real possibility that thousands of U.S. companies including manufacturers, retailers, farmers and others will be unable to move necessary supplies and products vital to their businesses. At a minimum, the cost of transportation for thousands of shipments will rise significantly if most port work stops from Maine to Texas, with broad negative consequences for what is already a fragile economic recovery.
“Any back-up of freight and equipment in the affected ports will have correspondingly negative 'ripple effects' on domestic transportation supply chains resulting in costly delays, disruptions and scheduling hardships from which recovery will be difficult and expensive,” he added.
Many carriers have also said they will impose hefty congestion surcharges on all cargo moving into or out of the United States, even ports on the West Coast or Canada if a labor dispute shuts down the East and Gulf coast ports. Earlier this week Maersk issued a notice to customers reminding them that those charges will amount to $800 on 20-foot containers, $1,000 on 40-foot boxes, $1125 on 40-foot high cube containers, and $1,266 on 45-foot containers.
Carlton noted that "Elements of our national transportation system are already recovering from an eight-day work stoppage earlier this month in the Ports of Los Angeles and Long Beach."
The ILA-USMX contract originally expired on Sept. 30, but the two
sides agreed to extend their contract for 90 days until Dec. 29. Is
there a chance that there could be another extension if a contract is not in place by that date?
That is one of many possibilities, said ILA
spokesman Jim McNamara on Thursday.
If the two sides can't reach an
agreement next Tuesday on container royalties, "that's not good, but if
they can, maybe they will say 'listen, we still have work to do on a
lot of other areas, local negotiations, but we are not angry with each
other, we just don't have the time.' That could happen. Nobody has talked about it, but logically, it is an option," McNamara said. - Chris Dupin