After our feverish 2012/2013 ILA Strike Watch, we thought you might like to know the fallout of negotiations.
Truth be told, it’s premature to say all is concluded. The announcement on February 1st that a tentative agreement had been reached brought a sigh of relief across the international shipping community and the country in general as a potential strike would cost the economy billions. Still, the word “tentative” dangles in the air.
Before the agreement officially brings security to the operations of the ports it has to be ratified by the local unions. On top of this, the local ILA unions have to negotiate issues specific to local ports across the East and Gulf Coasts.
What if they fail to reach agreements at these ports? Specifically in New York and New Jersey where negotiations have been especially tense?
No one really seems to know the exact answers to those questions. Everyone is working on the assumption that local agreements will be made and the Master Contract will be ratified.
In the meantime, ports continue to operate as local negotiations forge forward.
Now we do know many key points of the new (tentative) Master Contract agreed upon between the ILA and USMX reps who were in negotiation as the ILA released details about it last week.
Below are some key points the ILA shared about the new Master Contract with some comments from us.
• The new Master Contract will expire on September 30, 2018.
This should give us 5 years before you need to worry about another ILA Strike Watch on the East and Gulf Coasts.
• The new Master Contract will not take effect until all local bargaining is concluded.
• There will be a $1.00 per hour wage increase on October 1, 2014; another $1.00 increase on October 1, 2016 and another $1.00 increase on October 1, 2017.
This takes the $32 per hour base of experienced dockworkers to $35 per hour.
• New employees will start at $20.00 per hour.
• The wage progression formula, which was in the Master Contract extension, has been shortened from 9 years to 6 years.
This means that new employees, starting at $20 per hour, will be able to reach that $35 per hour number in 6 years. Of course, at that point, the Master Contract will have expired and new negotiations will have in theory taken place that could very well increase that experienced dockworkers wage.
• There will be a minimum coastwise guarantee of $211 million in container royalty for each year of the contract.
Container royalties was a major issue of contention between the ILA and USMX over the course of negotiations. Reportedly, USMX wanted to faze container royalties out while the ILA was unwilling to bend on the issue of royalties. This adds significant income increase to ILA members. When agreement was finally made in this area, seemingly very much in ILA’s favor, negotiations moved much faster toward completion.
• In addition, up to $14 million of administrative expenses will also be covered.
• All container royalty over these amounts will be evenly split between USMX and ILA.
Perhaps this is the concession given to the USMX in this matter.
• The local fringe benefit contribution will increase by $1.00 per hour.
• New language has been negotiated to protect those who have been displaced due to new technology and automation.
Job security in the midst of automation and new technology has been an ongoing concern for the ILA. The strike that happened on the West Coast by the Office Clerical Unit (OCU) workers in late November/early December of last year was largely over this issue of automation and new technology threatening to displace workers.
You can go to the ILA’s website to see the complete list they posted about the Master Contract.
As East and Gulf Ports are operating smoothly, we’re standing by handle your freight forwarding through them.