Contract talks between dockworkers, management break down

Talks have broken down between the union representing nearly 15,000 East Coast and Gulf longshoremen and the group representing shippers and port operators, with little more than a week to go before their contract expires.

Meeting Tuesday in Newark, N.J., with a federal mediator, the United States Maritime Alliance rejected a proposal by the International Longshoremen's Union to extend the talks until Feb. 1.

"The ILA wanted to say 'Happy New Year' with a contract extension to Feb. 1, 2013, but United States Maritime Alliance ... answered with a resounding 'Bah Humbug,'" the union said in a statement.

Talks on a master contract covering 14 ports, including Baltimore, broke off in late August, with leaders of both sides accusing each other of bargaining in bad faith. The agreement, approved in 2004, covers nearly 1,200 longshoremen at the port of Baltimore.

Industries that rely on the port to deliver goods are starting to signal their distress at the looming Dec. 29 expiration date.

The National Retail Federation urged President Barack Obama "to use all means necessary ... to keep the two sides at the negotiating table and head off a coastwide strike."

"If the port of Baltimore shuts down ... it would negatively impact every importer and exporter that utilizes the container port, from manufacturers and truck drivers to farmers and retailers, affect hundreds if not thousands of U.S. jobs, and cost the U.S. economy millions upon millions of dollars a day," said Stephen E. Schatz Sr., a spokesman for the federation.

A strike was averted in late September when George Cohen, director of the Federal Mediation and Conciliation Service, stepped in. Retailers and others feared that a disruption in cargo flow in the critical weeks leading up to Christmas would cripple the economy.

Both sides agreed to a 90-day extension.

After their Tuesday meeting, the maritime alliance accused the longshoremen of being intransigent on the issue of container royalties, a per-unit fee paid to laborers that has been part of contracts for 52 years. The group also blasted the union for failing to accept a shorter extension proposed by Cohen.

"It is especially disheartening, given the history of cooperation that in the past has characterized negotiations with the ILA and, since 1977, has resulted in nine new agreements without a single strike or coastwide work stoppage," James A. Capo, USMX chairman and CEO, said in a statement.

The union acknowledged in its own statement that the royalty payments were a non-negotiable item. The royalties were a way to compensate dockworkers for the emerging containerized cargo, which required less labor to move between ship and shore. At the time, very little cargo moved in the truck-size containers; now much of it does. The payments are worth as much as $14,000 a year for each worker.

Earlier this month, a 10-day strike by the International Longshore and Warehouse Union crippled the neighboring ports of Los Angeles and Long Beach, Calif., the nation's largest, and cost the West Coast economy an estimated $8 billion. A settlement was reached after federal mediators got involved.

Baltimore officials say the diversity of cargo would help the port weather a short-term disruption. The port 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.

The dollar value of cargo passing through Baltimore's public and private marine terminals in 2011 was more than $51.4 billion, a record, and a 24 percent increase over 2010. During the first six months of 2012, the port's public terminals handled a record 4.83 million tons of general cargo, a 10 percent jump over the same period in 2011.

The last coastwide longshoremen's strike was 35 years ago.

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