ILA issues...are they out of their #%@? minds?

From the ILA web-site... click here for link     International Longshoremen's Association, AFL-CIO Contract Issues with United States Maritime Alliance

12/20/2012

THE ISSUE: CONTAINER ROYALTY
International Longshoremen's Association, AFL-CIO wants to maintain Container Royalty Fund as it is in current contract. USMX, the employer group representing ILA employers, wants to put a cash ceiling or CAP on how much money is put into the Container Royalty Fund for current longshore workers and ultimately, eliminate the Container Royalty Fund.
The first container royalties were established in the 1960s as a way to protect members of the International Longshoremen's Association, AFL-CIO (ILA) in New York from job losses created by containerization and its introduction of automated cargo.
Container Royalty came about from negotiations and sacrifices made by ILA members since the late 1960s. Container Royalty supplements the members' income and keeps his benefits package financially strong. Container Royalty eligibility must be earned by an ILA member reaching a certain amount of hours worked each year. ILA work isn't like other professions: 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.
When containerization started the ILA was faced with a huge displacement of worker whose jobs were eliminated by the ominous steel boxes. The ILA was at a crossroad - allow containerization to be implemented or refuse. The ILA agreed to allow containerization to flourish but negotiated a fee based on the weight of each loaded container to be used for annual payments to the longshore workers whose job opportunities had been compromised due to containerization. As the number of containers being handled increased, the negotiated payment for each worker increased. Rather than being an annual bonus for each worker, as USMX suggests, this payment is compensation for the job opportunities lost by permitting containerization.
United States Maritime Alliance now wants to limit the amount of money that is paid ILA members and goes into various Container Royalty Funds by placing a CAP on the money collected in any given contract year. Container Royalty is collected by the amount of tons of containerized cargo ILA members handle. A total of $4.85 is collected on each ton of containerized cargo handled and is distributed to ILA workers as part of a Wage supplement and to the ILA members' health care fund, called MILA.
USMX ultimate goal is to eliminate Container Royalty, based on their last proposal to end it in 25 years.
ILA has suggested a way for Container Royalty to end now. If the Carriers don't want to pay Container Royalty, then bring back all the warehouses, and start stuffing and stripping again. A Carrier does not have to pay Container Royalty on a Container that has been stuffed and stripped by the ILA.
Automation continues to reduce the number of hours for hard working ILA members. Container Royalty wage supplements are more important today for ILA members than its ever been to keep America's commerce moving with skilled, trained longshore workers.


WAGES:
ILA and USMX have exchanged proposals and demands regarding on Wages based on a tentative six-year contract. The ILA has put in its demands wage increases that are reasonable and would enable our employers to remain competitive.
In its contract proposals to the ILA, USMX continues to treat ILA workers like second-class citizens. In all its public pronouncements on wages, USMX fails to note that longshore labor cost amounts to between 3% and 4% of the shipper's total cost. Unlike other hourly workers who work a 40-hour workweek, most longshore workers make themselves available for work on a daily basis. Early on, the ILA negotiated a guarantee of a day's pay. Otherwise, the employer had no obligation to pay if a vessel did not arrive on schedule. To the employer's benefit, Guarantee Annual Income no longer exists.
Also very important to note: For over 20 years, our employers enjoyed paying tiered wages where newer longshore workers were paid much less than their senior counterparts. The system was unfair and there was never light at the end of the tunnel. History shows that management enjoyed huge savings while ILA members, their locals, the Districts and the International all suffered with reduced revenues.


ILA HEALTH CARE FOR WORKERS:
The ILA's National Health care program is called "MILA"
Part of MILA is funded through Container Royalty money mentioned earlier.
USMX current proposal is that our MILA fund is so solvent that they'd like to defer payment of CR 4 for two years. USMX views this as a loan, promising to pay it back within third year of agreement. Their math is fuzzy. They claim CR 4 contributions down the road will be greater than the current $1.15. We think their contributions would end up being less with even a 5% bump in container growth.
USMX pledged early in negotiations that no matter what we agreed to with MILA, our fund would be sound and secure because they'd automatically pump money into the fund if the current $800 million reserve were to fall below $600 million. They called it a trigger and that it would kick in when the fund went below $600 million. CR-4 would restart.
Somehow, talk of a "trigger" has stopped. Their new formula? They only want a 6-month reserve with no trigger. That formula would take our current $800 million reserve down to the $200 million mark.
They will "Guarantee" the current benefit for the life of the contract if we agree to that two-year deferred payment to CR-4. The ILA asks "What reserve will we have at the end of a contract with this formula?" We are unsure about the impact from OBAMACARE.
ILA refuses to jeopardize the future of our MILA program by shortsighted decisions. Healthcare is extremely important to our members and their families and we want it financially secure.


OTHER ISSUES:
ILA and USMX did reach tentative agreements on automation and container chassis work and on some jurisdiction language.


LOCAL ISSUES:
All local issues and negotiated in the local port area. All ILA ports from Maine to Texas still need to resolve local agreements.

ILA Agrees to 90 day extention of contract

This from the FMCS web-site

Release Date: 9/20/2012

WASHINGTON, D.C. — "I am pleased to announce that at the close of today’s productive negotiation session, in which progress was made on several important subjects, the parties have agreed to extend the collective bargaining agreement due to expire on September 30, 2012 for a ninety (90) day period, i.e. through December 29, 2012. In taking this significant step, the parties emphasized that they are doing so “for the good of the country” to avoid any interruption in interstate commerce.

"This extension will provide the parties an opportunity to focus on the outstanding core issues in a deliberate manner apart from the pressure of an immediate deadline. The negotiations on the Master Agreement will be conducted during the same time frame as negotiations for local agreements. The negotiations will continue under the auspices of the FMCS. Due to the sensitive nature of these high profile negotiations, we will have no further comment on the schedule for the negotiations, their location, or the substance of what takes place during those negotiations."

click here for link

ILA contract talks to resume Sept. 19, 2012

According to the Baltimore Sun, contract talks between the ILA and USMX (representatives of
the carriers and terminals) will resume today, at a hotel in New Jersey.

It had been reported the locations of the talks would be undisclosed...but, admittedly there are
a lot of hotels in New Jersey.

These negotiations are being mediated by the Federal Mediation and Coalition Services.

The ILA union contract expires Sept. 30th, and the Union membership has already
authorized a strike.

From The Baltimore Sun

The maritime alliance says dockworkers are driving up shipping costs by taking advantage of liberal overtime rules. It says longshoreman are well compensated, making an average of $124,000 annually in wages and benefits, with management paying 97 percent of the cost of their health care plan.
The union says its members do dangerous work, often in adverse weather, and must be protected and retrained as the industry changes.

click here for link to article

Update ILA contract talks

The contract talks between the ILA and USMX are to restart this week, with a mediator.

The locations of the talks are being kept secret.  I presume the day to day outcome of the
talks will only be available from either the ILA, USMX, or the mediator.  I don't really know
what has been agreed.

The USMX web-site,  should post updates on the ILA negotiations, when available.

click here for the link.

So far, nothing has been posted.

Suggested Changes on the Waterfront

The negotiations with the ILA are to start again next week.   This time with an arbitrator from
FMCS.  From their web-site

Release Date: 9/6/2012

Upon the request of the Federal Mediation and Conciliation Service (FMCS), the parties have agreed to resume negotiations under our auspices during the week of September 17, 2012.  Due to the sensitivity of this high profile dispute and consistent with the Agency’s longstanding practice, we will not disclose either the location of the meeting or the content of the substantive negotiations that will take place.

I trust they will address many of the issues raised in the Waterfront Commission report of
March 2012.   It's a lengthy report, but appears to spell out the real problems with the
ILA Union at the ports of NY/NJ.

Of course, this is only one of the ports represented by the ILA, although it is the biggest, and
NJ is where the union is headquartered.

The report has some real gems, such as

Mr. Daggett emphatically testified that shop stewards are entitled to their six-figure
salaries.107 He claimed that shop stewards work twenty-four hours a day and help ensure that
there are “no labor problems” in the Port.108 Mr. Daggett testified that $400,000 “[is] not a lot of
money today,”109 a comment that would appear to be out of touch with reality.

In fact, in my opinion, the report is so damaging I don't know why the government hasn't taken
some action and closed down the ILA.   I guess everyone was waiting for the next round of
contract negotiations.  I don't know.   Of course it's difficult to tackle these problems,
and because the union is contracted by a "collective" and not one company, it's even more
difficult.

Here are the suggestions put forward in the report.   They are very valid, and I trust whomever
from the FMCS is handling the negotiations will read this report, and attempt to put these
changes in to place.

Based on the foregoing, the Commission recommends the following changes by the
shipping industry:

   “Ship time “or “terminal time” payments that go to a single person, whether or not the
person is actually working, should be eliminated. The implementation of a shift system,
rather than a continuous operation system, for all dockworkers would be a highly
advantageous change for Port efficiency.

    “Prime” positions – inflated salaries for little or no work should be eliminated.

     Desirable positions should be fairly distributed based upon sonority and merit. Training
for those positions should be fair and based upon objective criteria that will reduce –
rather than increase – the lack of diversity in the Port.

    Secret ballot elections should be held for shop stewards positions. These positions should
be for a fixed term of years with a clearly delineated process for recall and removal.

    Shop stewards should be assigned the same responsibilities and be paid the salary as their
co-workers. While time off should be given for the purpose of conducting union business,
any additional compensation for such work should be paid by the union under strict rules.

   All elected shop stewards should be trained as to the provisions in the applicable
collective bargaining agreements and their responsibilities in enforcing them.


 Check-in of checkers and longshoreworkers by the timekeeper should be done in a
manner that capable of being audited, which takes advantage of technology and does not
highly compensate favored individuals for little or no work.

Click here for link to complete report.  It is worthy reading.

Additional charges if there is a strike.

From The Journal of Commerce

Surcharges will take effect if ports shut down in labor dispute

Several container ship lines have announced congestion surcharges that will take effect if East or Gulf Coast ports are closed in connection with the International Longshoremen’s Association contract expiration.

The carriers are required to provide 30-day notice of the surcharges, which will be rescinded if the ports stay open. Among the announced surcharges:

-Maersk, for all shipments to from the U.S. and Canada: $800 per 20-foot container, $1,000 per standard 40-footer, $1,125 per 40-foot high-cube, and $1,266 per 45-foot container.
-Cosco, for shipments between Asia and from the U.S. and Canada: $800 per 20-foot container, $1,000 per standard 40-footer, $1,125 per 40-foot high-cube, and $1,266 per 45-foot container.
-NYK Line, for shipments to the U.S. from Asia, the Indian subcontinent and Australia: $1,000 per container.
-Hanjin, for shipments to and from U.S. and Canadian ports, $800 per 20-footer, $1,000 for other sizes.

I don't really know how they can justify these as "congestion surcharges", because no one knows
for sure what ports will be congested.  I really think these should be filed under "strike surcharge",
but of course there could be lots of service contracts which would be exempted from a strike
surcharge, although that would have been pretty foolish on the part of the carriers.

The other thing I would point out...notice how all these charges are "per container", which is
standard in the industry, EXCEPT for the ILA charges.   (see my previous post)
Idiots.

How the ILA gets paid

Contract negotiations between the ILA (union for the longshoremen...and they are mostly men),
and the representatives for the ocean carriers resume next week, thought it would be
interesting to look into their current contract.

The ILA load and discharge vessels, and move the containers around the terminals, at U.S. East and
Gulf Coast ports.

I don't know if there are any ships worked by the ILA which are not containerized, or ro/ro
(roll on-roll off cargo).  I doubt it.
But yet, the union has not conceded to change their pricing based on containerization.  They
still use an outdated method of charging some of their charges based on weight....and not just
weight, but the commodity.  This is used to fund what is called the "Container Royalty Fund".
I don't know the entire history of this fund, but most likely it came into being when
ships went from bulk to containers.

The calculation using weight and commodity  is a throw back to the truck tariffs, which
disappeared around 1980 as trucking was deregulated.  In fact, when the ILA comes to
your office to audit this report, they drag in an old trucking classification book.

If you want to know more about this, I found a bit of the history at ftc/gov.  Click here for the link.

The basis for the calculations is so convoluted and complicated that many carriers hire outside
companies (I think they are old retired ILA guys...but don't quote me on that), to file their reports.
It's something which is very difficult to capture from the computer system.
 Here's what is says in the master contract regarding Container Royalty Payments

.RULE 10 – CONTAINER ROYALTY PAYMENTS
The two Container Royalty payments, effective in 1960 and 1977
respectively, shall be continued and shall be used exclusively for
supplemental cash payments to employees covered by the
Management agreements, and for no other purpose. The remaining
royalty payment effective in 1971, also shall be continued and shall
be used for fringe benefit purposes only, other than supplemental
cash benefits, which purposes are to be determined locally on a portby-
port basis. The Container Royalty payments shall be payable only
once in the continental United States. They shall be paid in that ILA
port where the container is first handled by ILA longshore labor, at
longshore rates. Containers originating at a foreign port which are
transshipped at a United States port for ultimate destination to another
foreign port (“foreign-sea-to-foreign-sea containers”) are exempt
from the payment of container royalties. Container Royalty payments
shall be asserted against all containers moving across the continental
United States by rail or truck in the foreign-to-foreign
“LANDBRIDGE” system.

This is in addition to the hourly wage paid to the employees, which ain't small
change.

Here is the link to the Master Contract of the ILA which was signed in 2009.   Click here.http://www.ilaunion.org/pdf/MasterContractAndMemorandumOfSettlement.pdf

I'll be posting about it and other things about the ILA over the coming days.