The Pacific Maritime Association (PMA) expects negotiations on a new labor contract with the International Longshore Workers Union (ILWU) to begin in mid-May. The current contract expires on July 1.
Stephen Hennessey, senior vice president and chief operating officer for the PMA, told attendees of the Port Productivity Conference of Cargo Business News sponsored by Port Everglades this week that while negotiations began earlier in 2008 (on March 17), during the last round of contract talks, “the fact of the matter is that it didn’t do us any good.”
In 2002, negotiations had been particularly difficult, and agreement on a contract was not reached until after a 10-day lockout of dockworkers; President George W. Bush obtained an injunction under the Taft-Hartley Act.
So an early start was made in 2008 — “on St. Patrick’s day by two Irishmen,” he said — by PMA President James McKenna and ILWU President Robert McEllrath. But little was accomplished in the early meetings that year.
“Nobody really moves until there is pressure, and there really is not a lot of pressure until you get to the expiration of the contract,” he explained.
This year, Hennessey said, “I expect the negotiations will be tough; they will go long. If history tells you anything, they will go past July 1, but usually we find a way to work it out.”
PMA staff has been meeting with its members — for example, Hennessy had recently returned from The Hague, where he met executives from APM Terminals, and Copenhagen, where he met with officials from Maersk — and developing its positions, a process he said was almost completed.
Later this month and in early March, about 100 members of the ILWU will gather in San Francisco for their Coast Longshore Caucus to discuss their goals and approach to bargaining later this year.
In December, Bob McEllrath, the president of the ILWU, told members attending a conference on the union’s history and traditions that the group was “facing some big fights and need all hands on deck,” according to an account in the union’s newspaper The Dispatcher.
Reviewing the contracts reached in 2002 and 2008, Hennessey said the negotiations in 2002 were difficult as management negotiated an agreement that “allows for the free flow of information in and out of terminals without human intervention.”
That change, he said, allows terminals to handle more cargo without expanding their footprint. It primarily affected marine clerks, he said, and many of their jobs were eliminated. The PMA took on an additional $1 billion in pension obligations.
In 2008, management successfully negotiated language in the contract allowing for more automation at terminals. He said that this language will affect the jobs of longshoremen, and in exchange, the ILWU secured jurisdiction over the maintenance and repair of cargo handling equipment.
He noted that two automated container terminal are under construction in southern California — the TraPac terminal in the port of Los Angeles and the OOCL’s Long Beach Container Terminal in Long Beach.
Hennessey said that there has been an 18-percent improvement on hours paid per box move to 1.77 hours from 2.16 hours in 2002; productivity in the past three years has been flat. He said the hope is that automation will help drive further gains in productivity.
Hennessey said one of major issues during the negotiations will be ILWU benefits and their administration. As a result of the last negotiation, the administrator of health benefits was changed to a company with electronic systems, and Hennessey said $100 million in fraud was uncovered in the form of inappropriate billing, services such as cosmetic surgery and simple overbilling. Under the Affordable Care Act, he noted that employers will also be subject to a 40-percent, non-deductable excise tax on the value of benefits that exceed $27,500 per family.
“ILWU members pay no health care premiums and receive 100-percent coverage for standard medical benefits,” according to the PMA annual report. A chart in the same report shows ILWU-PMA welfare benefit costs per active registrant were more than $45,000 in 2012.
Hennessy said jurisdiction is likely to be an issue in the negotiations as maintaining and expanding jurisdiction is a primary focus of unions. As technology and automation eliminate existing jobs, he said unions are looking to add new jobs.
He reviewed a number of recent jurisdiction battles that the ILWU has been involved in recently.
- At the EGT export grain terminal in Longview, Wash., the ILWU was able to obtain jobs after numerous demonstrations, including one that resulted in its president, Bob McEllrath, being sent to jail overnight. Hennessey noted the ILWU was able to obtain jobs, albeit at reduced manning levels.
- A breakdown in contract talks between ILWU Local 63, Office Clerical Unit, resulted in a seven-day strike in late 2012 that closed about half the container terminals in Los Angeles and Long Beach. Hennessey said the strike was caused by an unsuccessful attempt by Local 63 to expand jurisdiction.
- A dispute between the ILWU and Pacific Northwest Grain Handling Association, which represents four non-PMA grain handling companies in Washington and Oregon, continues. Hennessey said employers want reduced manning and more flexible work rules. He noted that one employer (Temco) has implemented its “last, best and final” offer under which the ILWU is working. Negotiations with the other three companies continue.
- In the Port of Portland, the ILWU was able to obtain jurisdiction over two positions for workers to plug and unplug refrigerated containers. Hennessey said millions of dollars were spent on litigation over the issue of whether the ILWU or the International Brotherhood of Electrical Workers should perform the work. The dispute was resolved after the intervention of Oregon Gov. John Kitzhaber, but litigation continues.
Hennessey also noted that jurisdiction over maintenance and repair work for chassis was a major issue in the most recent contract between the ILA and USMX.
“We have every expectation of getting a contract,” said Hennessy. “Can I promise you there is going to be a contract? No. Are there real tough issues? There are real tough issues, and we are going to be at this for a while. History will tell you with a couple of exceptions, the deal gets done.”