July 23, 2012 US Shipping and Longshoreman’s Negotiations Hopeful The International Longshoreman’s Association (ILA) and the United States Maritime Alliance (USMX) appear to be getting closer to an agreement on a new labor contract. The ILA represents 15,000 members working along U.S. East and Gulf Coast ports. The USMX represents employers of that area’s shipping industry, including 24 container carrier members and every major marine terminal operator and port association in the area. Labor Contract Negotiations The current labor contract, extended for two years in 2010, expires on September 30, 2012. Generally, contracts run for a three-year period. Ongoing negotiations have been well publicized, with some reports of possible labor strikes. Despite the speculation of a strike, history shows the two parties have reached agreement over the last nine successive terms. Even without a signed contract by the expiration date, work could continue past the deadline or there could be another extension to the contract. ILA Issues on the Table ILA President Harold Daggert identified four key issues for discussion. Use of technology at terminals causes concern over the potential for displacing ILA jobs Guarantee ILA workers continue to maintain and repair chassis even though there is a trend of shipping companies pooling equipment or selling to non-shipping industry companies Preservation of ILA jurisdiction over waterfront jobs Weighing arriving containers for safety reasons and to ensure ILA is fully compensated for weight-based “royalties” Progress Reported Negotiations continued in Delray Beach, Florida. The ILA and USMX issued a joint statement on Thursday, July 19, 2012 reporting, “they have made significant progress in their negotiations, resolving a number of key issues toward reaching agreement on a new contract.” John Nikolich, director, OL&T Global Marine shared that OL&T is “cautiously optimistic,” that ILA and USMX will reach an agreement before the expiration of the current contract and that a labor strike is unlikely. “With the economy in its current state, the holiday season approaching, a national election close to the expiration date of the current contract, and ocean container carriers claiming big losses again in the first half of 2012 we further believe a strike is unlikely, however, we remain vigilant,” he explained. What Shippers Can Do OL&T urges shippers to stay informed on the negotiations, and advises them to reassess the situation in August. Depending on the status of the negotiations, shippers may want to consider building additional facility supply for those shipping through both East and Gulf Coast ports. It is important to note that the area’s port operations will remain unaffected during the negotiation period. OL&T will continue to monitor the situation and provide updates as they become available.