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September 3 2018

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September 3 2018 | The Journal of Commerce 15 www.joc.com International Maritime A TENTATIVE, SIX-YEAR master contract between the Internation- al Longshoremen's Association (ILA) and United States Maritime Alliance (USMX) would prohibit fully automated terminal operations for six years at East and Gulf ports covered by the contract, according to a summary of the deal posted on the union's website. The agreement, reached by the ILA and USMX on June 6, also addresses the challenges of the me- ga-ship era, according to the 14-min- ute video featuring a presentation of the contract by Executive Vice President Dennis A. Daggett. The contract gives terminals greater flex- ibility in managing union workers — allowing a reduced mandatory work period — in situations in which a vessel fails to arrive on schedule. The video provides the first details of the contract, which, if approved by rank-and-file ILA members, would ensure labor peace on both coasts until at least 2024, and parallels a labor deal for US West Coast ports lasting until 2022. the video a "clear and unambiguous representation of the [proposed] agreement." The ILA-USMX master contract covers wages, medical benefits, carrier-paid container royalties, and other coastwide issues. Bargaining on supplementary local and regional contracts, which cover work rules, pensions, and other port-specific issues, are conducted separately. Union leaders say they want the union's locales to reach an agreement on local issues before voting on the master agreement. Although the ILA and the Port of New York and New Jersey reached an agreement in early July, not all of the locales met a July 10 deadline by which ILA President Harold Daggett had hoped to get all the local contracts wrapped up, and some are still negotiating. In the video, Dennis Daggett, Harold's son, said he believes the deal is "the best ILA contract ever negotiat- ed," adding that it represents a "giant step forward" for the union. Indeed, the contract goes far deeper into the union-employer relationship than the West Coast contract extension did, the latter reached after the International Longshore and Warehouse Union (ILWU) and the Pacific Maritime Association (PMA) agreed to limit negotiations to two basic items — wages and pensions and length of contract. The extension, which lasts until July 2022, does not address hot-button issues such as ILWU jurisdiction or automation. West Coast labor disruptions, including a 10-day lockout in 2002 and months of delays during contract negotiations from 2014 to 2015, trig- gered a shift in cargo volumes away from the West Coast and toward East and Gulf Coast ports, which hope to retain the market share they gained. Since 2010, the West Coast's market share of loaded cargo has declined from 50.45 percent to 44.9 percent in 2017, according to PIERS, a sister product of The Jour- nal of Commerce within IHS Markit. The East Coast share of all loaded containers rose from 41.7 percent to 46 percent between 2010 and 2017, PIERS figures show. The Gulf Coast share of all loaded container increased from 6.9 percent to 8.5 percent from 2010 to 2017. For shippers, ratification of the agreement would remove the uncertainty hanging over the Gulf and East Coast ports as the Sept. 30 expiration of the contract approach- es. The union has yet to ratify the contract, and declined to comment on it beyond the video. The ban on fully automated terminals, however, could also quash shipper hopes that some of the East and Gulf coasts' more expensive ports — among them the Port of New York and New Jersey — might harness automation and technology to cut costs and improve efficiency. The contract gives union members a $1 an hour base pay increase in four years out of six, increases by $104 mil- lion the worker share of container roy- alties generated, and sets aside money for a defined contribution retirement plan, according to the video. USMX declined to comment on the contract or the video, which ap- pears to be aimed at union members who have the right to vote to ratify the deal. But one USMX official, who asked not to be identified, called Job protection Tentative ILA-USMX contract bans full automation of terminals for length of deal By Hugh R. Morley Virginia International Gateway in Norfolk is one of the most automated terminals on the East Coast. Backus Aerial Photography Importing & Exporting | Ports | Carriers | Breakbulk | Global Logistics

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