Negotiations to avoid labor strikes at East Coast and Gulf Coast ports broke down

Cranes stand at the APM Terminals yard at the Port of Mobile in Mobile, Alabama, U.S., on Thursday, July 20, 2017.

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The International Longshoremen’s Association, which represents union workers at East Coast and Gulf Coast ports, said Monday that it had suspended negotiations scheduled to take place this week with the Union. United States Maritime Alliance as part of the agreement. are negotiating a new labor contract.

ILA said in a statement that it had canceled talks with the port board to discuss a new labor agreement after discovering that automated technology was being used by APM Terminals and Maersk, the shipping company. The world’s second largest ocean shipping company and parent company of APM Terminals, uses for handling. Trucks at the docks do not have union labor. The union said the “automated gate” system was initially identified at the Port of Mobile, Alabama, but the union said it believes the technology is being used at other ports.

“Here we go again! This is another example of USMX members unilaterally breaking our Coastwide Master Contract. This is a clear violation of our agreement with USMX and We will not tolerate that anymore,” the union said in the press release. “There is no point in trying to negotiate a new agreement with USMX when one of its major companies continues to violate our current agreement for the sole purpose of especially eliminating ILA jobs through automation.”

A Maersk spokesperson said in an emailed statement that APM Terminals remains “fully compliant with the ILA/USMX Master Contract.”

Maersk said: “We are disappointed that the ILA has chosen to make public selected details of the ongoing negotiations in an effort to gain more leverage for their other demands. We will continue to cooperate.” engage with all stakeholders, including the ILA, to address their concerns.” The spokesman said.

USMX could not immediately be reached for comment.

ILA is the largest longshoremen’s union in North America, representing 85,000 members. The ILA’s main contract with the U.S. Maritime Alliance – which represents port operators and ocean carriers – expires on September 30. May 17 was the original cut-off date set by the alliance so that local contracts are unified to have a comprehensive contract. The contract can then be negotiated.

In July, Daggett, the union’s chief negotiator, said he wanted a good economic deal for his members, which included the union’s opposition to port automation and other contracts. Exclusive port for its members. In a speech to union members that month, Daggett vowed that the ILA would not back down from anyone. “It is time for foreign companies like Maersk and MSC to realize that you need us as much as we need you,” he said.

The ILA said in its statement that it would not respond to USMX until the “automated gate” issue was resolved.

Despite the history of this alliance and the ports reaching agreements in recent decades, logistics companies and shippers still expressed concern about the risk of a strikewith more orders for the peak shipping season returning to West Coast ports.

There is an East Coast container exodus in the US supply chain

There are many issues in global trade affecting key shipping routes, from ongoing Red Sea hostilities causing ships to divert on longer routes around Africa, to droughts in the Panama Canal and drought conditions in the Panama Canal. Container freight rates have increased dramatically recently. This is a critical time of year for consumer goods arriving in the United States, and delays related to longer shipping times, container shortages and weather have added to logistical challenges ahead of the season. school and holidays.

Nate Herman, senior vice president of policy at the American Apparel and Footwear Association, recently told CNBC.

In the West Coast International Longshore and Warehouse Union (ILWU) contract negotiations from 2022 to 2023, cargo handling operations have stalled following a series of deliberate labor standoffs mind and quit his job. At the ILWU’s Canadian West Coast ports, a 13-day strike left more than $12 billion worth of trade stranded at sea, and it took months for the backlog of containers to be cleared. That led to a reversal in trade flows, with more goods sent to ports including New York/New Jersey and Virginia to avoid labor conflicts.

As previously reported by CNBC, the current ILA contract calls for union members to earn between $20 and $37 an hour. Depending on seniority, skill rate, hazard pay, overtime differential, plus tonnage bonuses (which can range from $15,000 to $20,000 a year), a longshoreman can earn anywhere from $150,000. up to 250,000 USD per year. Port insiders told CNBC earlier this year that ILA is targeting a larger increase than the 32 percent increase negotiated by ILWU in the new six-year contract. ILA is also said to be looking to secure a generous bonus package. In July, ILA leadership singled out the Great Lakes District union, which had guaranteed a 40% pay and benefits increase for the new six-year contract. ILA has not yet set a definitive salary increase target.

Negotiations on the six-year contract officially began in February.

The most recent six-year contract between the port and ILA was signed at the end of September 2018. Daggett then called “the greatest contract in the history of the ILA.”

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