Looming strike could shut down ports

The move could cripple container cargo shipping along the East and Gulf coasts. Retailers are calling on President Obama to take action before the Sunday strike deadline.

By Bruce Kennedy Dec 26, 2012 3:02PM

Image: Cargo ship (Image Source/Corbis)Along with the fiscal cliff, there's another crucial and economically important deadline looming. A strike could shut down more than a dozen shipping container ports along the Eastern seaboard and the Gulf Coast.


The National Retail Federation, backed by scores of national and state associations, has been calling on President Obama to take action to ensure a possible walkout by the International Longshoremen's Association (ILA) doesn’t take place on Sunday.


At issue are terms of a new six-year contract between the longshoremen and the U.S. Maritime Alliance, which represents container carriers, port associations and other employers along the East and Gulf coasts. The longshoremen's union represents 14,500 workers at 14 ports.


Both sides have agreed to meet with federal mediators, who are staying closed-mouthed about whether there’s been any progress ahead of the contract extension that ends at midnight on Dec. 29.


In a letter to the president issued last week, the retail federation's vice president, Jonathan Gold, warned that "a strike of any kind at ports along the East and Gulf Coast could prove devastating for the U.S. economy, particularly considering the economic setback suffered by the ports, especially the Port of New York/New Jersey, as a result of Superstorm Sandy."


Gold also pointed to the recent, eight-day-long strike at the ports of Los Angeles and Long Beach in California by a different dockworker’s union -- as well as a similar, 10-day lockout in 2002 along West Coast ports -- to underscore the economic disruptions of any new walkout.  


The 2002 strike, he said, cost the U.S. economy about $1 billion a day -- while retailers and port operations took months to recover from the disruption.


It also had "a profound impact" on the retailers, importers, manufacturers and other companies that rely on the ports every day, he wrote. An extended strike now could have a greater impact considering the fragile U.S. economy, he added.


At the heart of the labor dispute is the container royalty, a payment established in the 1960s when America’s shipping ports were transitioning from labor-intensive dock work to containerization and automated cargo systems. Employers are looking to limit those payments.


"The initial reason for implementing container royalties -- to protect ILA members from the loss of work -- has long been forgotten,” says the U.S. Maritime Alliance. "Unlike the Port of New York and New Jersey, then and now the predominant port on the East Coast, ILA workers at ports like Savannah and Charleston saw their job opportunities grow because of containerization. The container royalties they receive have been a bonus that has nothing to do with any adverse job impact caused by containerization."


But the union argues automation and containerization continue to reduce work hours for its members -- and the container royalty supplements are essential.


"ILA work isn't like other professions," says the union’s web site, "no ships mean no work, but employers depend on a strong and skilled workforce when ships need to be worked. Container Royalty helps keep an ILA workforce available."


An ILA strike would not affect military cargo, mail delivery or non-container cargo such as cars and some perishable items, according to the Associated Press.


Observers, meanwhile, say the dispute could lead to a sea change for both the shipping industry and labor unions.


"The shipping industry is trying to take back some of the power," economist John Husing told the Los Angeles Times, "but they are up against a union that has abnormal power for its size and one that is in a very strong position."


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235Comments
Dec 26, 2012 11:58PM
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Who could possibly have sympathy for the ILA workers and this ridiculous threat of a strike.  There jobs are protected and they are already overpaid.  It is completely selfish of them to create hardships for so many others out there who aren't compensated in a similar fashion who won't be working because truckers won't find loads to get them moved out of the area.  Warehouses all over the US will not be getting product coming in and warehouses workers won't have work, product won't be shipped to the retailers etc.   It is a chain of effects all by greedy union workers who have no real reason to cry the blues.  Unions are a joke!!  Join the real world.  And yes, they are all family and friends etc...you can't get a job as a longshoreman unless you are on the inside too consequently. 
Dec 26, 2012 11:50PM
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Get rid of the unions private, government, including the teachers & municipal unions.  They are a cancer eating away this country.  Obama will do nothing because he wants the unions to cripple this country.  Obama's whole agenda is the destruction of the USA, economically & socially.  The dock workers are nothing but a criminal entity and always have been.   All that congress & Obama know is spend, spend, spend, and take care of themselves & special intrests and welfarers then hell with the rest of us.  The next 4 years is going to impovrish this country. 
Dec 26, 2012 11:34PM
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These union members are idiots, you are lucky to have jobs at all in this economy.

I am an ex construction manager, I was an electrician prior to being a manager and can't even find a job in service or construction.

I watched the industry fall, the last thing the US needs right now are strikes.

I realize the work is very physically and time challenging but that is your trade or career, striking while our country is selfish as well as damaging to our economy and all it does is cause more problems.

I don't like working for a huge company either but the trade for a consistent paycheck and working for the man is better than no income at all.
Dec 26, 2012 11:28PM
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I've NEVER seen a union worker work hard. They stand around waiting for breaks. That's a fact, Jack! They may start with good intentions but all turn into lazy, clock watching bums. It spreads like cancer throughout the workforce.
Also, don't hand me all that sentimental crap. Unions had there place in the past. The government regulations in place deem Unions unnecessary. There isn't any "protection" the labor board can't offer than a Union can. (Other than keep a lazy person their job. Which seems to be the job of the unions nowadays. 
Dec 26, 2012 11:27PM
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These people should be glad they still have a job if for some reason one of these ports close for good well they deserved their lay off.I hope they have a months salary saved up this could get ugly.
Dec 26, 2012 11:23PM
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Nobody remembers what the Unions had to "give up" in order to receive those bonuses.  Concessions are made in order to re-align work rules and work hours in order to modernize labor contracts. To give up a bonus bargained for many contracts ago equates to pay cut.  A deal should be made to absorb those bonuses into future wage increases. 
Dec 26, 2012 11:21PM
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Please learn to spell, people. Jeez.
Dec 26, 2012 11:14PM
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funny thing about hostess........thier product was dietary crap....never changed thier business model to products that would'nt last for a century...oh yeah in 2004 the union agreed to reduced wages and benefits and hostess rewarded them by giving thier CEO a 300% raise... why would the workers agree to pay cuts again
Dec 26, 2012 11:09PM
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Let them strike.  They may find themselves in another Hostess situation in a hurry.  Unions don't have the power they used to have. 

These "cliffs" are nothing more than a way to stick it to the taxpayers from every direction.  Stock up and hunker down.  It's the government that's going to get hurt with less tax money to spend...

Don't pay your taxes till the last minute and file for your refunds fast......even less money till April..let them find out how to cut their spending first.

Dec 26, 2012 11:04PM
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typical unions who they all think they know whats best.  shut them all down.  put them all out of work just like hostess
Dec 26, 2012 11:01PM
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GOOD MAKE ALL THE IMPORTS SO COSTLY TO UNLOAD THEY WILL FORCE THEM BACK HOME TO GOOD OL USA! KEEP THE GOVERNMENT OUT OF IT .REMEMBER WHAT HAPPEN WHEN PRES REGAN GOT INVOLVED.
Dec 26, 2012 10:58PM
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I'm reading allot of comments from people that seem to be jealous of the wages that union members make. It's not their fault that you either don't have the balls to stand up to employers and demand good wages and benefits. The workers pocketbooks are the real job creators and the better the working clas does the better the country does. Stop buying chinese ****,be proud that you spent an extra dollar for something made in this country. Big business has done a great job of pitting workers against each other. Quit being a sellout and stand up for workers in this country, there is no third world country where the workers make  a living wage,just third world countries where workers are willing to cut each others throats.
Dec 26, 2012 10:56PM
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We had the Port of Los Angeles Strike for less than 3 weeks and we survived but I don't know how long we could survive a strike on the east coast.   TImes they are a changing...not good for 2013. Hate to be a pesimist..(sp)...(I need spell check)lol
Dec 26, 2012 10:52PM
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Hmmm. Maybe the companies that manufacture their stuff in this country will have a leg up on the importers. :)  For the first time in many years may something (or rather someone) can say something FOR USA manufacturers and retailers of made in USA products.
Dec 26, 2012 10:49PM
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Cool...Just think what all my Chinese merchandise will be worth by months end....Weee go Union!
Dec 26, 2012 10:49PM
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Good, I don't buy anything from china anyway. 
Dec 26, 2012 10:45PM
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Unions are destroying America, government unions, private unions are all too blame for the mess.  They are greedy stupid people who would cut off their own arms to spite their bodies.  They all need to go and every state a right to work state, they have out lived their usefulness.
Dec 26, 2012 10:31PM
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What will I do without my Chinese stuff?  Buy something made in america?  Put someone to work?  Wow, this is really a disaster (for the rich retailer). 
Dec 26, 2012 10:30PM
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The nitwit who wrote this left off a few points, the union now gets $30 per hour plus another $30 per hour in bennies, the offer from the industry is another $4.00 per hour. Thus in salary and bennies $64 per hour. Do you make that? Talk about greed..

Dec 26, 2012 10:29PM
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