East Coast port strike averted for now

Monday, December 31st, 2012 By

Longshoremen

A strike of port workers that could have crippled the nation’s imports and exports has been averted, at least for a month. Image: cliff1066(TM)

News of a possible port strike by East Coast workers has worried many in an already-fragile economy that is teetering on the brink of the fiscal cliff. However, it seems labor and management have come to a tentative agreement and the strike has been averted — at least for now.

Port strike threatened economic upheaval

Earlier, it was announced that 14,500 members of the International Longshoremen Association (ILA) would go on strike, starting at 12:01 a.m., Dec. 30. That could have brought 14 ports from Boston to Houston to a screeching halt, and prevented about half of U.S. imports and exports from moving. That in turn could have left railroads, tucking firms and other companies that handle freight with nothing to do.

Some have predicted that such an event would be catastrophic to the nation’s fragile economy, which has enough worries just days ahead of the fiscal cliff deadline. President Obama has been pressured by business leaders to halt the strike by exercising powers reserved for emergency situations. In an attempt to avoid that, the federal government sent in mediators to help labor and management come to terms.

Tentative agreement

Finally, the U.S. Maritime Alliance (USMX) and the ILA reached an agreement on Friday, December 28. The potential strike has, for now, been averted.

Bone of contention

The bone of contention in the dispute has been “container royalties,” a fee paid by shipping companies that supplements the wages and benefits of workers. The ILA, which has not gone on strike for 35 years, contended that the USMX was inflating wage and benefit estimates for the purpose of eliminating the royalties.

The matter of container royalties is resolved now, at least in principle, according to the federal mediators that helping to negotiate the agreement. Labor and management have agreed to extend talks for another 30 days to finish hashing out a new collective bargaining agreement.

Cautious optimism

Federal mediators believe the matter can be resolved without a disruption of work next month, however. George Cohen, director of the Federal Mediation and Conciliation Service, said: “While some significant issues remain in contention, I am cautiously optimistic that they can be resolved in the upcoming 30-day extension period.”

The exact terms of the agreement was not disclosed. But holding off on a final agreement until after learning the fate of the fiscal cliff debacle may be a smart move for parties on both sides of the negotiation fence.

Sources

Daily Finance
Miami Herald
Washington Post

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