East Coast Port Union Calls on Mediator to Push Contract Talks Forward
The East and Gulf Coast port contract negotiations have hit such a standstill that both parties will need a federal mediator to get a deal done and avoid an Oct. 1 dockworker strike.
The United States Maritime Alliance (USMX), which represents maritime employers including ocean carriers and marine terminal operators, said the International Longshoremen’s Association (ILA) notified them on Thursday that the union filed for mediation on Aug. 19.
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According to the USMX, the ILA filed a Form F-7 with Federal Mediation & Conciliation Service (FMCS), the agency tasked with assigning mediators and arbitrators to labor disputes. The USMX filed the same form with the FMCS on Aug. 23.
“While negotiations with many ILA Locals have continued to progress, despite repeated efforts and continued outreach, USMX has been unable to secure a meeting with the ILA to resume negotiations on a new Master Contract,” the alliance said in a Friday press release.
Sourcing Journal reached out to the ILA.
The ILA called off master contract negotiations in June due to the implementation of an automated gate at Alabama’s Port of Mobile. The union has taken exception to the system since it can be autonomously processed without ILA labor. Additionally, the union says the gate is being used at other ports, but has not specified which.
“Many Americans understand that their own jobs are threatened by automation, and by employers who are more interested in the bottom line than paying them fair wages,” said ILA president Harold Daggett in a statement Thursday. “The general public knows and remembers that ILA workers kept commerce moving throughout the pandemic, and never shut the ports down, allowing goods to be delivered to their communities.”
Since abandoning the master contract talks, the ILA has kept a tight lip on progress, with the union setting up an internal meeting to present final contract demands to its wage scale committee delegates on Sept. 4-5.
Federal mediation was not called upon by either the Pacific Maritime Association (PMA) and the International Longshore and Warehouse Union (ILWU) during 2023’s West Coast port negotiations, which ended in a six-year contract agreement that June. Although there was no official mediator, Acting Labor Secretary Julie Su helped facilitate the deal in the final days of the negotiations.
Bringing a federal mediator on board could be a promising sign for negotiations, as history indicates.
The last time a mediator was called upon to help move major U.S. port negotiations forward was December 2014, when the FMCS entered a previous round of talks between the ILWU and the PMA that had lasted since that May. The sides brokered a new five-year deal less than two months later.
The East and Gulf Coast ports last required mediation in December 2012. In that negotiation process, mediators were able to extend the expiring master contract 30 days, giving both parties just enough time to eke out a six-year deal on Feb. 1, 2013.
This time around, the ILA has been insistent that its union dockworkers across 36 ports from Maine to Texas will go on a strike if a new deal is not reached by Sept. 30.
A potential work stoppage has started to spook shippers, forcing many to bring more cargo over to West Coast ports and continue pulling more orders forward as the clock ticks on the negotiation deadline. Shippers looking to get product from Asia to the U.S. East Coast already missed the boat on leveraging that trade lane ahead of a possible strike, as those journeys typically take two months.
In an online briefing on Aug. 19, Hapag-Lloyd CEO Rolf Habben Jansen observed “there is some temptation by customers to bring in goods ahead of the labor contract expiry on Sept. 30.”
Habben Jansen already shared in the ocean carrier’s earnings call that he was more worried about a looming strike than he was in January, saying “unfortunately, the chances that there will be some disruption have definitely gone up.”
Port operations would be impacted substantially in the event of a strike. Just one day of strike action would require six days to clear the backlog, according to analysis from Alan Murphy, CEO of Sea-Intelligence.
As the negotiations await a mediator to be appointed, the union is demanding wage hikes “commensurate” with the elevated profits and revenues seen by USMX member companies in the wake of the Red Sea crisis, which pushed up freight rates as container shippers avoided the Suez Canal and took longer shipping times around Africa.
Reports from CNBC have indicated that the ILA is seeking out a wage increase larger than the 32 percent negotiated for West Coast dockworkers last year.