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 8:54PM
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Its an easy fix, these greedy companies need to sit down and negogiate with the longshoremen immediately.  GREED is what this is all about, its time to share a little more with the people who are out there day in and day out. Without these professional personell these greedy corporations would and are clueless.  NEGOGIATE    THE   RESOLVE   Quit asking the President to step in on something that you aren't will to solve. 
Dec 26, 2012 8:50PM
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I am so sick of unions......do the job or dont....make all the welfare recipiants go do the jobs. i'm so sick of stupid unions telling the employers what they need to pay and give in benefits.....the employers should be the ones saying "this is the job and the pay, take it or leave it" the employees should not be telling the boss what they will n wont do.....wow
Dec 26, 2012 8:48PM
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Keep in mind the strike will impede export of US made goods and resources. It's not just imports that are impacted. 

Not all imported items are for retail. Many US jobs use parts made overseas that are assembled in to products such as Honda, Toyota, Harley Davidson, etc. 

We truly live in a global economy. Research and think before posting.
Dec 26, 2012 8:47PM
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While I appreciate the fact that everyone needs to make more money as the cost of living keeps going up, here is another example of unions thinking only of their small part in the big picture. If they succeed in shutitng down port operations they will impact the entire nation. The mentality is if they can piss off enough people they will win support and sympathy. I think that economic blackmail by the unions has to stop. I for one am tired of big unions holding an entire nation or community hostage.
Dec 26, 2012 8:46PM
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a general strike is what this country needs to shake up the establishment,its happened all throughout our history. Why not now?Time to cut the crap.
Dec 26, 2012 8:44PM
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Why would they worry about there JOBS they have a UNION.  to back them after they are fired.
Dec 26, 2012 8:40PM
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Blackmail and fiscal terrorism, performed to "pity me" violin music.

Longshoremen, holding the world hostage one container at a time.
Dec 26, 2012 7:55PM
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A perfect storm is forming - striking doc workers, poor retail sales, the fiscal cliff, QE4, the implementation of Obamacare, ever-growing deficits and debt, the student-loan debt bubble, double digit food inflation, etc...  We never really recovered from the recession of 2008 and it looks like we have years of stagnation and recessions in our future.  And to top it all off, thanks to a massive failure of leadership in Washington, we don't even know what our tax liabilities are going to look like 6 days from now.

Dec 26, 2012 7:10PM
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Big business would cut wages to 10 cents an hour if they thought they could get away with it.  That way they wouldn't have to call it slavery.  Watch the CNBC "American Greed" series if you want a peek into the minds of these crooks!
Dec 26, 2012 6:45PM
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Get ready for the big squeeze.....! Union Busters....Gun Control...Socialized Medicine...More stupid laws and regulations......Higher unemployment.....Higher gas.....Higher payroll Taxes.......dismal sales numbers coming across from all sort of sectors....Retail...Manufacturing....etc..Wall Street Tumbles and ....Recession...!!! GET READY...!
Dec 26, 2012 4:10PM
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You tie this into other news and think about it... retail sales were dismal this season. It's the TWENTY SIXTH OF DECEMBER and Valentine Day merchandise is being shelved. A lot of Christmas stuff was from last year or before that with updated tags. The price of gas still hovers around $3.50/gallon, there are more lay offs and even more coming by the end of January. Corporate executives and traders are still making a whole lot of money off administrative and financial control and manipulation. All that said, the Longshoremen are tasked with unloading super tankers at super fast speed, load them on trucks and see them off to retailers who a dismal season and before that had record clearance racks instead of decent sustaining activity. Am I missing something here or is the Longshoremen Strike REALLY A GOOD THING and the National Retail Federation isn't? As for pleading to Obama... get in line, even his voters get stiffed for help. If the man doesn't get off his Twitter, throw out the Norquist Pledgers in Congress and start pushing back on Wall Street Banks-- we aren't going to last much longer. Yea... TAX the rich. Yea... PAY FAIR WAGES to workers and lay off dumb alumni administrators. Yea... too much paperwork makes for fire hazards not integral businesses. Yea... Bernanke may have gotten A's in school but he's just a numbers flunkie in the real world and we're screwed as long as the Federal Reserve exists.
Dec 26, 2012 4:03PM
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So the dock workers who already get paid a salary are willing to risk their jobs and the already fragile economy over a "bonus".   I'm sure there's a line already forming of people wanting your jobs.  
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