Dockworkers dropped their threat of an imminent strike against ports from Boston to Houston after their union and shipping companies reached a deal on the main point of their dispute, a federal mediator announced Friday.
The mediator said the two sides had agreed to extend the existing contract by 30 days, to Jan. 28, to give them time to try to reach an agreement on the remaining issues, including what the companies say are antiquated work rules. Late Friday, the two sides issued a new announcement, saying they had agreed to extend the contract an additional week, to Feb. 6, creating a new potential strike deadline.
The partial agreement means that the union, the International Longshoremen’s Association, will not carry through on its threat to have 14,500 dockworkers go on strike Sunday at 14 ports along the East and Gulf Coasts.
In a statement Friday, George H. Cohen, director of the Federal Mediation and Conciliation Service, said the two sides had reached an agreement in principle on a particularly contentious issue, known as “container royalty payments.”
The shipping companies share those payments with union members for each ton of cargo handled. The union had for months denounced the companies’ proposal to freeze those payments for current longshoremen and eliminate them for future employees. No details about the agreement were disclosed.
“What I can report is that the agreement on this important subject represents a major positive step toward achieving an overall collective bargaining agreement,” Cohen said. “While some significant issues remain, I am cautiously optimistic that they can be resolved in the 30-day extension period.”
After the talks broke off on Dec. 18, Cohen persuaded the two sides to return this week for a last-minute round of bargaining. They have been negotiating on and off since March.
The U.S. Maritime Alliance, a group of shipping companies and terminal owners, said it paid $211 million in container royalties to the dock workers last year, averaging $15,500 for each eligible union member.
James A. Capo, the alliance’s chairman, said the royalty payments amounted to $10 an hour on top of what he said were already generous wages.
“This issue seems to have dwarfed anything else,” Capo said this week.
The maritime alliance, known as USMX, said the longshoremen earned $124,000 a year on average in wages and benefits, including the royalty payments. Union officials said those figures were exaggerated and put average annual wages at $75,000 before benefits, for what they described as dangerous jobs moving heavy cargo. Under the current contract, most longshoremen earn $32 an hour.
The container payments were created in the 1960s to compensate the longshoremen because many were losing their jobs as seaports embraced automation and the use of standardized, 40-foot-long containers to ship goods.
The shipping companies view the royalty payments as a relic of decades past. But the union still sees the payments as a core part of wages and as an important way to share productivity gains with members. The payments come to $4.85 a ton, the union said.
5 things to know about negotiations
1. PORTS INVOLVED
Boston; New York-New Jersey; Philadelphia area; Baltimore; Hampton Roads, Va.; Wilmington, N.C.; Charleston, S.C.; Savannah, Ga.; Jacksonville, Fla.; Miami area; Tampa, Fla.; Mobile, Ala.; New Orleans; and Houston.
2. THE DEADLINE
The contract expires Feb. 6 now that the two sides agreed to a second contract extension and factored in winter holidays. Federal mediators are involved.
3. KEY ISSUE
A sticking point has been a freeze on royalties workers get for every container they unload. Mediators say it’s been resolved but did not provide details.
4. GOODS THAT WOULD BE AFFECTED
Items transported in containers, such as flat-screen TVs.
5. GOODS NOT AFFECTED
Items including military cargo, mail, automobiles and perishables such as food.