Strike Is Possible, ILA's Daggett Warns

The Journal of Commerce Online - News Story

Harsh words worry shippers, even as management says ‘failure is not an option’

International Longshoremen’s Association President Harold Daggett warned of a possible ILA strike if the union can’t secure acceptable terms in a new contract.

“I’m not threatening to strike, but you’ve got four hurdles to jump over,” Daggett told an audience at The Journal of Commerce’s 12th Annual Trans-Pacific Maritime Conference in Long Beach on Tuesday.

He identified those hurdles as technology and automation, union jurisdiction, chassis and overweight-container issues. "We are going to really try to make it work ... We are trying our best to avert a strike," Daggett said.

Daggett’s statements and combative tone did little to reassure shippers already jittery about labor disruptions in U.S. East and Gulf coast ports when the ILA’s current contract expires Sept. 30. This year’s negotiations will be the first led by Daggett, who was elected ILA president last July. Several shippers and forwarders said after the session they were disturbed by what they heard and planned to investigate alternatives to protect themselves against possible labor disruptions this fall.

James Capo, chairman and CEO of United States Maritime Alliance, who spoke in a panel discussion with Daggett, said he’s optimistic the two sides will reach agreement. He said he’s been trying to reassure shippers that the negotiations are “a process” that takes time to work through. “I think I speak for both of us when I say that failure to reach an agreement by Sept. 30 is not an option,” Capo said.

Daggett’s tone was balanced by Benny Holland, the ILA’s executive vice president, who said the union is sensitive to its role in the movement of commerce. “Keep in mind we haven’t had a strike for 35 years,” Holland said. “We don’t intend to have a strike but if we are pushed to the hilt, we will have no choice. But I can tell you it is our intention to keep moving that product. We're going to get a contract that will move that product. I don't want anyone to leave here thinking they have to divert their cargo ... We're going to get over these hurdles.”

The ILA and USMX plan to open negotiations this month in Tampa after the union’s 200-member wage scale committee hashes out contract demands.

Daggett said the health of the shipping industry is improving with the economy. He said shipping lines’ losses last year were caused by “ordering too many mega-ships too soon,” not by ILA costs.

He said, however, that carriers’ orders of additional large vessels indicate they expect the market to improve, “so as we go forward in our negotiations with USMX, both parties need to look forward to a growing economy in the United States.”

Daggett said automation and technology will be trickiest issue in this year’s negotiations. He reiterated his position that automation is a threat to ILA jobs. “We can have the best contract in the world but if we have automation, it will be bull,” he said.

He recalled the late Teddy Gleason, the ILA’s president during containerization’s formative years, “negotiated contracts that allowed automation to flourish, but he always protected the jobs and livelihoods of every ILA member. I intend to do the same.”

Daggett renewed his criticism of ILA-contracted carriers’ decision to shift chassis maintenance and repair to leasing companies, although Capo noted the ILA hasn’t lost a single job as a result of the changes.

Daggett cited A.P. Moller-Maersk’s decision to sell its chassis-leasing unit to a private equity firm, Littlejohn & Co., and said he worried that the change would threaten ILA jurisdiction over chassis maintenance and repair. “Let me tell you something. Big Harold was not pleased to read about Littlejohn. I’m sure Big Bob McEllrath, my friend and ILWU president, wasn’t happy to read about it, either,” Daggett said.

McEllrath, president of the International Longshore and Warehouse Union on the West Coast, said the ILWU would support the ILA’s goals in this year’s negotiations.

Daggett said the ILA would continue to push for a crackdown on overweight containers. In addition to being a safety hazard, underreported weights on containers hurt the ILA by reducing carriers’ tonnage-based container royalty payments to support bonuses and benefits.

He also renewed his criticism of the New York Shipping Association’s $6 million damage lawsuit against the ILA and several New York-New Jersey locals for a two-day work stoppage in September 2010. The work stoppage was provoked by ILA pickets from Philadelphia who protested the shift of Fresh Del Monte’s fruit imports to a non-ILA terminal.