A strike that threatened to shut down container traffic at ports along the eastern seaboard and the Gulf Coast was averted Friday with the sides nearing consensus on the major sticking point in the contract talks: Royalties, or bonuses paid to longshoremen for each container they take off or put on a ship.
The International Longshoreman’s Association said its 14,650 members would walk out on contract talks after midnight Saturday if the U.S. Maritime Alliance refused to back off its stance to eliminate the bonuses that can double a longshoreman’s pay to well over $100,000 a year.
There was no word on what was agreed upon.
The two sides had been bargaining for eight months before talks stalled Dec. 18. This week they met again under pressure from port directors, retail federations fearing their goods would not be distributed, even the White House.
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“The container royalty payment issue has been agreed upon in principle by the parties, subject to achieving an overall collective bargaining agreement,” Federal Mediation & Conciliation Service Director George H. Cohen said in a statement.
The new deadline for the signing of a new contract is midnight Jan. 28.
Friday’s announcement won praise from port operators from Boston to Houston, and special praise from the National Retail Federation, whose members feared losses in the billions as they envisioned containers stuck at ports stuffed with clothing, electronics and appliances.
A strike would have affected non-perishable and some frozen goods. Flowers, fresh fish, military cargo and mail would have continued to flow.
The NRF applauded the near accord, but warned the two sides still had work to do.
“A coast-wide shutdown is not an option. It would have severe economic ramifications for the local, national and even global economies and wreak havoc on the supply chain,” NRF President Matthew Shay said in a statement.
The news was also welcomed regionally by Florida Gov. Rick Scott, who in the past two weeks has implored President Barack Obama to invoke presidential powers to delay or avert any strike that could harm the $66 billion a year cargo container business that flows through the state’s ports.
In a brief statement Friday, Scott again urged Obama to invoke the Taft-Hartley Act if necessary, even while calling the détente “good news.” Taft-Hartley, which has not been invoked since President George Bush used it in 2002 to stop a devastating west coast port strike, mandates an 80-day cooling off period, then mediation.
Locally, a shutdown would have affected hundreds of workers at Port Everglades and PortMiami, many of whom operate the giant gantry cranes that tower above the ships at port.
PortMiami Director Bill Johnson said his port does $18 billion a year in container business, and had several shippers who employed longshoremen, including giants Maersk and Mediterranean Shipping Company. Cargo containers take up about 40 percent of PortMiami’s business.
“To me, this certainly seems like positive news,” said PortMiami Director Bill Johnson. “We’re hopeful they can continue the negotiations.”
Port Everglades would fare better than PortMiami if there were a strike. Only two container shipping companies at the port hire longshoremen. Most of Port Everglades big-ticket items, like petroleum, would not be affected.
Any strike would affect 15 U.S. ports from Boston south along the seaboard to Florida, then up into Tampa and Houston in the Gulf of Mexico. The cruise industry would not be affected.
The Journal of Commerce estimated a port strike could affect $1 billion a day in economic activity.