Federal mediators will attempt to restart stalled contract talks between the union representing 14,500 East and Gulf coast dockworkers and the group representing their employers in an effort to avert the first strike in 35 years.
A strike would clot the shipment of billions of dollars of goods in and out of the eastern United States at the peak of the holiday shipping season, potentially driving up prices and threatening the nation's nascent economic recovery. The dockworkers' current contract expires Oct. 1.
Baltimore port officials greeted word of federal mediators' intervention with relief.
The Maryland Port Administration had begun making contingency plans for a walkout or work slowdown. After a closed-door briefing Thursday morning, the administration's commissioners voiced concern that a disruption could put the brakes on strides made by the port since the recession.
"I'm scared," said Commissioner Helen Bentley, the former head of the Federal Maritime Commission and a five-term congresswoman. "I understand that the longshoremen have to be protected — and they have been for many years. But the new leadership at the ILA has been making threats unlike any we've had on the East and Gulf coast negotiations in 35 years."
The Federal Mediation and Conciliation Service announced Thursday that the International Longshoremen's Association and the U.S. Maritime Alliance will resume negotiations during the week of Sept. 17, just two weeks before the contract is set to expire.
"Due to the sensitivity of this high profile dispute and consistent with the agency's long standing practice, we will not disclose either the location of the meeting or the content of the substantive negotiations that will take place," Director George Cohen said in a statement.
ILA spokesman Jim McNamara said mediators contacted both sides Wednesday to get talks back on track.
"This is encouraging. We're grateful," McNamara said. "It's before Oct. 1, so, yeah, there's time."
Bentley agreed it was encouraging but remained cautious.
"I'm glad to have the FMCS because it means the federal government is very serious about this," she said. "The administration certainly did not want a waterfront strike before the election."
James White, the port's executive director, said he remained optimistic despite the looming deadline.
"The guys on the pier don't want to strike. Management doesn't want to strike. We don't want to stop our momentum," he said.
Baltimore's longshoremen are represented by four locals. Rocky McKenzie, a spokesman for 1,000-member Local 333 — the largest shop — said his organization wouldn't comment on the resumption of talks or the prospects for settlement.
"We'll wait to hear from our negotiating team," he said.
The sudden deterioration of labor relations came as a shock to port officials and the business community.
The union and the maritime alliance, which negotiates for 43 port managers and shippers from Maine to Texas, have successfully negotiated nine master contracts — with time to spare — dating back to 1977. The latest deal, which took effect in 2004, was extended two years to allow the economy to recover and ports to get back on their feet.
It looked like business as usual when talks began in Tampa, Fla., last March. After two days of meetings, negotiators issued a joint statement saying they expected to reach an agreement "well before the expiration of the current contract" at midnight on Sept. 30. They issued another upbeat report after meeting in July.
But just hours into discussions on Aug. 22, everything fell apart. The union accused the maritime alliance of raising issues not previously discussed and adopting a "take it or leave it" stance on overtime pay and other provisions. The alliance said the ILA wouldn't compromise on management's need to adopt new technology to stay competitive and take advantage of profitable Pacific Rim business and Panama Canal traffic.
"But without the productivity improvements that technology can help deliver, ships carrying that cargo will find somewhere else to go," the maritime alliance said in a statement.
The alliance also wants to update work rules to eliminate what it calls redundancies and cap so-called container royalties paid to longshoremen. The royalties began in 1960 to compensate dockworkers for the emerging containerized cargo, which required less labor to move between ship and shore. At the time little cargo moved in the truck-sized containers; now much of it does. The payments mean an extra $14,000 a year for each worker.
When negotiations fizzled, McNamara said union members realized they might have to strike.
"I don't know that there are any other options," he said. "We're hoping for the best, but preparing for the worst."
To show their resolve, the local for the Port of New York and New Jersey — the ILA's largest — voted last week to authorize its president to call a strike when the contract expires.
That rattled organizations up and down the coast.
The National Industrial Transportation League, the largest organization in the country representing shippers, appealed to U.S. Transportation Secretary Ray LaHood to step in.
Three trade groups — the American Apparel and Footwear Association, the Travel Goods Association and the Fashion Accessories Shippers Association — sent a letter to both sides on Tuesday urging them to settle their differences to avoid affecting holiday retail sales with higher prices and shortages.
"In addition to causing extreme losses of port business and huge expenses for many levels of the supply chain, the need for unwanted cargo diversions and the existence of full-on work stoppages, if they were to occur, would have dire consequences for the already-struggling U.S. economy and the consumer population as a whole," the letter said.
The Virginia Port Authority issued a release saying it would process as much cargo as possible at state-owned cargo terminals in the Hampton Roads harbor before the deadline. Officials said shippers would likely redirect as much as 15 percent of their traffic to West Coast ports to avoid disruption.
But White said that wouldn't offer much relief.
"There's only so much capacity. Eventually, the terminals fill up, the warehouses fill up and the rails are congested," he said.
Baltimore officials are still assessing the potential economic fallout on its workforce of 14,630 and the 108,000 additional workers with port-related jobs.
White said there are indications that a strike might be limited to container traffic, leaving autos, bulk and roll-on, roll-off cargo and the cruise business unaffected. Baltimore is ranked No. 1 among 360 U.S. ports for handling farm and construction machinery, autos, light trucks, imported forest products, imported sugar, imported iron ore and gypsum. It ranks second in the nation for exported coal, imported salt and imported aluminum.
"There are opportunities. We have diversity that was created by our strategic plan," White said.
Labor experts said the union and the maritime alliance could extend the deadline while talks continue — a possible scenario given the fact that they voluntarily agreed to return to bargaining.
But White isn't sure that accomplishes anything.
"It gives you more time to talk," he said. "But 80, 90 days down the road, you're still going to face the same issues."