Friday, December 28, 2012

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ILA-USMX talks: Container royalty agreement reached with 30-day extension

The lingering threat of a waterfront labor strike in the eastern U.S. after talks broke down last week has been averted for the time being with today's news that an agreement has been reached on container royalties along with a second extension of the master contract deadline, this time for 30 days, between the International Longshoremen's Union and the United States Maritime Alliance.

"The container royalty payment issue has been agreed upon in principle by the parties, subject to achieving an overall collective bargaining agreement," said George Cohen, director of the Federal Mediation and Conciliation Service in a statement.

The details of the container royalty agreement were not disclosed over an issue that has reportedly been a central bone of contention between the ILA and USMX since their contract expired September 30 when they agreed to extend their negotiations to the end of this year.

Container royalties paid to the ILA were initially introduced at the dawn of containerization in the early 1960s to protect any loss of labor jobs due the advent of containerization and automation in cargo handling.

According to the USMX, those payments have since grown to over $211 million in 2011, and the shipping employers said they wanted to place a cap placed on them in the next contract.

"What I can report is that the agreement on this important subject represents a major positive step toward achieving an overall collective bargaining agreement," said Cohen.

Although the container royalty issue's resolution represents a significant step forward in the ILA-USMX contract negotiations, Cohen said "some significant issues remain in contention," but he also said he's "cautiously optimistic that they can be resolved in the upcoming 30-day extension period."

The president and chief executive of a group representing U.S. retailers, who are collectively dependent on container ports for handling freight that has been sourced from all over the world, shared the cautious optimism.

"While a contract extension does not provide the level of certainty that retailers and other industries were looking for, it is a much better result than an East and Gulf Coast port strike that would have shut down 14 container ports from Maine to Texas," said Matthew Shay of the National Retail Federation in a statement.

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