ILA Strike Watch 2013: East Coast & Gulf Ports Strike Looks Unlikely

 In container shipping, exports, ILA Strike, Imports, International Shipping

The negotiations are not over yet, but many businesses are letting out a sigh of relief over the tense situation caused by threats of an ILA strike at East Coast and Gulf ports that would have seriously repercussions for the U.S. economy.

It seemed a very strong possibility that 2013 was going to start with picket signs and important U.S. ports shutting down, hurting the international business of importing and exporting goods in this country.

Now, the strike is beginning to look unlikely.

Neither the ILA or the USMX are discussing details of their talks; however, George H. Cohen of the Federal Mediation and Conciliation Service (FMCS) released a statement on Friday that gives reason for everyone to believe a strike will not happen.

The biggest news of the press release was that the strike that was on the verge of beginning had been postponed. The press release stated the strike had been pushed back 30 days to January 28th. It was later updated that the postponement is to February 6th.

The strike had been postponed before. As the past revised dates drew near, there was much apprehension that the strike would take place and the still recovering U.S. economy would take a blow.

Why should it be different this time?

Is it like the boy who called wolf? Had the ILA threatened the strike too many times and had it pushed back so much that no one will take the next date seriously? No. I don’t believe that is the case.

Is the ILA not serious about striking? No. They seem very serious and as was proved by the OCU strike on the West Coast, an ILA strike could happen quickly and be very costly to the USMX and the country’s economy.

So why does it now seem so unlikely that the strike will happen? Two words: Container Royalties.

Container royalties has been a major sticking point in negotiations between the ILA and the USMX. Container royalty payments have created supplemental income for the ILA. Shipping companies have been seeking to reduce and possibly even get rid of container royalty payments while the ILA seemed to be inflexible when it comes to adjusting these payments.

This very container royalties issue caused the ILA and USMX to leave the negotiation table time and again.

But according to Cohen’s FMCS press release, “The container royalty payment issue has been agreed upon in principle by the parties, subject to achieving an overall collective bargaining agreement.”[1]

Cohen also said this in the statement regarding the time between now and the revised strike date, “during which time the parties shall negotiate all remaining outstanding Master Agreement issues, including those relating to New York and New Jersey.”[2]

That statement certainly sounds declarative that the negotiations will be successfully completed before the strike occurs. Cohen used a little more careful language later, “While some significant issues remain in contention, I am cautiously optimistic that they can be resolved in the upcoming 30-day extension period.”[3]

Certainly, Cohen’s message in the press release was one of optimism meant to, at the very least, calm the gloom and doom fears of businesses that would be majorly hurt by an ILA strike.

So what was the agreement made concerning the royalty payment issue? “Given that negotiations will be continuing and consistent with the Agency’s commitment of confidentiality to the parties, FMCS shall not disclose the substance of the container royalty payment agreement,” Cohen said.[4]

However, according to an In These Times article by Bruce Vail, “a federal mediator reported that a critical sticking point had been resolved in favor of the union.”[5]

This would seem the likely outcome as the ILA was so firmly standing their ground on this issue.

Of course, just because there is reason to believe the strike will not happen at this point, that is not to say the strike cannot happen.

As always, we here at Universal Cargo Management will be vigilant and keep you informed on news the possible ILA strike situation.

We’re also always ready to give you a free freight rate quote on the goods you need to import or export for your your business.

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