BREAKING NEWS: ILA/USMX Agree to New 30 Day Contract Extension

A work stoppage as a result of a strike from approximately 14,500 dockworkers along the East Coast has been put on hold:

“USMX / ILA and Federal Mediation and Conciliation Service have agreed to a 30 day contract extension, during which time they will continue to negotiate for a new Master Contract.”

Here is the Federal Mediation and Conciliation Service (FMCS) official release confirming this statement. As we wait for farther updates, here is a rehashing of useful information – but again, the immediate threat has been averted for at least 30 more days.

The dispute is between the International Longshoremen’s Association (ILA), a group representing the dockworkers, and the U.S. Maritime Alliance (USMX), a group representing shipping lines, terminal operators and port associations. There are many contributing factors to the disagreement – but it primarily focuses on containers royalties. These royalties augment the dockworkers wages and benefits and play a significant part in their total compensation.

The strike would affect 15 major ports from Boston to Houston. Together, these ports move more than 100 million tons annually, or about 40% of the nation’s containerized cargo traffic. Below are the answers to the most frequently asked questions our customers are asking.

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1) Why are the dockworkers threatening to strike?

The ILA said its members would agree to an extension only if USMX dropped a proposal to freeze the royalties workers get for every container they unload. The Alliance has argued that the longshoremen, who it said earn an average $124,138 per year in wages and benefits, are compensated well enough already.

2) Can’t we just hire replacement dockworkers?

Dockworkers are responsible for the loading and unloading of cargo. “Many of them, like the crane operators who transfer containers from ships to the docks, are highly skilled and cannot be easily replaced,” writes Steven Greenhouse of the New York Times.

3) What can shippers do to best adapt?

Many companies planned ahead and have stocked up on extra supplies in an attempt to outlast the strike. Others are planning on utilizing other modes of transport like rail and air.

4) What cargo will be affected?

The ILA has publically stated that the strike won’t affect all cargo – just containerized cargo such as household goods, clothing, and frozen foods. As a strike-preparation memo from the International Longshoremen’s Association explained, workers will still handle U.S. mail, military cargo, perishable goods such as fruits and vegetables, as well as non-containerized “break bulk” goods such as cars, wood products, and steel.

5) What is being done to avoid the strike?

More than 100 business groups have written to President Obama calling on him to intervene by using his emergency powers under the Taft-Hartly Act of 1947. President Bush used it in 2002 to end the similar West Coast lockout. The White House has weighed in on the issue, urging dockworkers and shipping companies Thursday to reach agreement “as quickly as possible” on a contract extension. Obama spokesman Matt Lehrich said the administration is monitoring the situation closely.

Source: The Washington Post, Southern California Pubic Radio