Longshore union, shipping lines begin critical negotiations

Staff writerMay 13, 2014 

As the union representing West Coast longshore workers and the group speaking for shipping lines and terminal operators begin new contract negotiations this week, much is at stake.

The labor group, the International Longshore Workers Union, wants to keep its strong grip on waterfront jobs at a time when attacks on that near monopoly are becoming more frequent, and the Pacific Maritime Association wants to craft an agreement that will provide some financial stability to an industry that is suffering losses from overcapacity.

Talks began Monday in San Francisco where both the ILWU and the PMA both have their headquarters. Their objective is to reach a new agreement by the June 30th expiration of their current pact, signed in 2008.

At stake, too, is the general competitive position of West Coast ports, which are already struggling to maintain market share for imports because of challenges from Canadian ports and the soon-to-open upgraded Panama Canal.

Faced with lower taxes at the Canadian ports and lower transportation costs with all-water routes to Eastern and Gulf Coast ports, West Coast ports need to adopt new technologies and working schemes to keep their costs competitive.

Most observers expect the talks will continue beyond the June 30 deadline without a strike or lockout, but shippers are anxious about the possibility of such actions as they begin to stock up on imported Christmas merchandise.

The head of the National Retail Federation earlier this year called for the negotiations to begin earlier than mid-May, but the PMA and the ILWU stuck with their schedule.

Retailers still have the damage they suffered in 2002 when the PMA locked out the ILWU for two weeks after the contract expired. President George Bush then invoked a law that sent the workers back to the jobs, but not before the economy suffered an estimated $2 billion hit.

Maritime sources don't expect the union to strike, but the labor group could slow down the processing of cargo to let its unhappiness be known if negotiations were moving slowly.

The ILWU is one of the most powerful unions still standing.  According to the PMA, the average longshore worker putting in a full-time schedule made $142,000 in wages last year and some $82,000 in benefits.

Longshore pensions pay up to $80,000 a year per retiree.  And longshore workers receive 13 paid holidays and six weeks of vacation, the PMA said.

The union members' health plan is one of the most generous in the country with no premiums for members, 100 percent payment of health care costs for workers, their families and retirees and only $1 per prescription co-pays for drugs.

It's that generous health care plan that could be a major stumbling blocks in talks this year.  Under the Affordable Health Care Act, such "Cadillac" health care plans will be taxed to help provide health care for the uninsured.

The the union and the PMA, that tax could amount to $150 million annually.

"Who is going to pay that additional $150 million in taxes?" asked PMA President Jim McKenna.



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