Wednesday, September 5, 2012
USMX rejects "final offer" gauntlet thrown down by ILA
The alliance representing shipping industry management at cargo ports on the East and Gulf coasts has rejected the demand issued by the longshoremen's union late last week to submit a "best and final offer" as work rules, wages and benefits have risen to the fore as the most contentious hurdles to getting a new master contract hammered out by the September 30 deadline in order to avert a possible waterfront labor strike.
"I'm not sure how the ILA can expect a final offer when we have been unable to engage in any comprehensive negotiations for a new contract, including economic issues," wrote James Capo, chairman of the United States Maritime Alliance in a letter and email sent to Harold Daggett, president of the International Longshoremen's Association, on August 31.
Capo was responding to a letter his group had received from Daggett dated August 30 that charged the USMX's latest position as "gutting wages and benefits."
Daggett's letter said ILA leadership had "formally requested that USMX provide them with their best and final offer so that the 200 ILA Wage Scale delegates can convene and take a vote on the proposal and also vote recommend a strike."
"At this time, USMX does not believe it is in a position to present a final offer to the ILA for consideration by its Wage Scale Committee," wrote Capo to his counterpart.
The ILA and USMX re-engaged with their on-again, off-again negotiations in Florida in late July as both sides at that time claimed to their respective members that there had been "significant discussions" on "critical items of importance" and that "substantial progress" had been made over what each have referenced publically as the central issues that include terminal automation, chassis pools, wages and benefits.
On the first two points, Daggett said last week that ILA leadership was "encouraged by the agreements we achieved with USMX in July on the issues of automation and chassis work."
However, the last two points - wages and benefits - appear to have emerged as the central areas of contention as talks between the two sides broke off in late August.
Capo said his group is "referring to archaic work rules and manning practices, and the system of guarantees and overtime pay practices that result in millions of dollars being paid for time not worked. These inefficiencies are causing many of our ports to become prohibitively expensive, harming our competitive ability and threatening the long term viability of our operations."
Daggett said on Friday "USMX demanded that the ILA give up its eight-hour guarantee that many port areas of the ILA have had for years. USMX also demanded that the ILA radically change the hard-fought contractual rules for the payment of overtime. These were items that should not even have been part of the master contract discussions, but USMX insisted that talks could not continue unless we agreed to negotiate this items."
"United States Maritime Alliance boasts of having successfully negotiated contracts with the ILA without any disruptions to service since 1977, but they fail to mention that stability came with tremendous sacrifices made by the ILA and a spirit of cooperation between the shippers and carriers on one side and the ILA on the other," said Daggett.
The USMX announced earlier last week that its membership would also like to place a cap on the so-called "container royalties" that employers claim rose to over $211 million in 2011.
Container royalties were initially implemented to protect ILA members from any loss of work due to the advent of containerization and automation in cargo handling in the early 1960s.
"Today, thousands of workers who were not even born in 1960 – or in 1968 when container royalties were first distributed – continue to receive payments that in 2011 averaged $15,500 for ILA workers at the 14 East and Gulf Coast ports," the USMX said.
"Not all of that money ends up in the pockets of ILA members; their union gets 10 percent – $21 million last year – through a checkoff from each member's royalty payment" the employer group said.
The USMX referred to ILA workers as being "among the most highly compensated workers in the country, on average receiving $124,138 a year in wages and benefits, which puts them ahead of all but 2 percent of all U.S. workers."
The ILA's Daggett retorted in a statement that: "USMX fails to note that longshore labor cost amounts to between 3 percent and 4 percent of the shipper's total cost."
When, and if, the two sides might get back to negotiations continues to be unclear as the shipping industry reportedly girds for the possibility of a longshore labor strike that could stretch from Maine to Texas.
"We stand ready and willing to engage in comprehensive bargaining to reach agreement on a new contract, including all economic issues," said Capo.
"However, that comprehensive bargaining must include substantive discussion on the issues raised by USMX. We must discuss putting programs in place that will correct these issues over a period of time," Capo said.
The National Retail Federation's president and chief executive officer, Michael Shay, said last week that without the "certainty" of a "secure, long-term" longshore labor contract, retailers and other shippers "will surely reevaluate their supply chains and the short-term and long-term reliance on these ports."
"Now that there is a real risk of disruption, most retailers using the East and Gulf Coast ports will be forced to executive contingency plans within the next week to meet in-store holiday deadlines," Shay said.
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