What the Looming Port Strike Is Really About

It’s not about jobs. It’s not about safety. It’s not about improving dockworkers’ living standards. The looming, long-planned East and Gulf Coast port strikes are about protecting Big Labor’s archaic work practices and corrupt waterfront rackets.

Are you ready for a fiscal cliff? The union bosses of an estimated 14,500 workers at 15 ports are preparing to send the economy plunging back into recession over productivity and efficiency rules changes. You read that right. Much more on that in a moment. But first, here’s what’s at stake.

The International Longshoremen’s Association’s (ILA) grip extends from Boston to Texas to Florida and all points across the Atlantic and Gulf Coasts. The New York-New Jersey ports — which handle cargo valued at $208 billion — could come to a standstill. National Retail Federation executive Jonathan Gold issued a desperate statement: “The last thing the economy needs right now is another strike, which would impact all international trade and commerce at the nation’s East and Gulf Coast container ports. This is truly a ‘container cliff’ in the making.”

Retailers have begged Big Labor-lovin’ President Obama to intervene. Good luck with that. The cozy White House powwow with union bosses immediately after Election Day tells you all you need to know about which side Obama champions.

The United States Maritime Alliance (USMX), which represents 14 Atlantic and Gulf Coast ports, has been bracing for a union-spearheaded shutdown since the summer, when labor negotiations fell apart. The ILA’s current contract expired on Sept. 30. Federal mediators granted a 90-day extension that ends on Dec. 29. ILA President Harold Daggett won a unanimous green light earlier this month to call a strike if industry leaders don’t give in completely to the union’s demands. According to my sources, despite overwhelming industry concessions on wages and benefits, port watchers view the likelihood of a strike at “probably 70 to 85 percent now.”

Don’t believe the union sob stories. ILA members are among the highest paid union workers in the country. Starting pay for dockworkers is $20 an hour, with a top straight-time pay rate of $32 an hour. Longevity and overtime bonuses are generous, with ILA members earning an average of more than $124,000 a year in wages and benefits.

The sticking points of the heated ILA-USMX talks are “container royalties” (a fee per ton of containerized cargo that carriers pay to ILA members) and “customs and practice.” On the New York-New Jersey waterfront, union racketeers have turned archaic work rules into a corrupt system of patronage tied to organized crime. Reporter Carl Horowitz of the National Legal and Policy Center broke down the container royalty dispute this fall: “In 2011 these royalties amounted to $232 million or about $15,500 per worker at Atlantic and Gulf Coast ports. This arrangement was established in 1960 when New York Longshoremen sought to protect themselves against job losses resulting from the introduction of automated cargo container weighing. It’s been a ticket for inefficiency.”

In other words, it’s a ridiculously outdated surcharge on business to cushion the blow of modernity to workers. Unions, of course, siphon off a large chunk of the royalties — more than $20 million last year alone, according to the Supply Chain Digest. The trade publication points out that “ILA workers receiving those hefty checks today have no real connection to the perceived threat from container traffic to manually loaded freight and handling work that started the whole program in the 1960s.”

USMX hasn’t even called for eliminating the outdated fees. It just wants to cap them. Under the industry’s contract proposal, ILA’s average hourly rate would increase to more than $55, including overtime and container royalty. Workers would still not be required to pay premiums on their health care plans like most private employers now require their workers to do.

But the union won’t budge, and it is screaming bloody murder over attempts to rein in other inefficiencies.

The additional “customs and practice” that the ILA seeks to preserve are a recipe for corruption. Don’t take industry’s word for it. This was the conclusion this year of the Waterfront Commission of New York Harbor. Decades of favoritism, nepotism and Mafia-friendly hiring practices have bred inefficient and criminal conditions that benefit “a privileged few.” The union protects no-show and no-work jobs, 24-hour paid work for 8-hour-a-day-or-less clerks, and unlimited paid vacation for shop stewards. ILA has demanded that multiple crane operators be paid for the work of a single operator. And the commission’s hearings exposed ILA bosses tied to mobsters and family members being paid more than $400,000 a year for up to 27 hours a day.

Union bosses and their Occupy Wall Street henchmen will be ratcheting up their rhetoric about “greed” and “fat cats” as they move to ring in the New Year by bringing the American economy to its knees. Now you know the rest of the story.

  • JaxBill

    Just to clear things up a bit, we are taking a stand to keep what we now have, not an increase.

    The ILA strike letter states that we will still work auto vessels, break bulk, military, and passenger ships. The USMX has told the Stevedore companys (the are the contractors of our industry) to not work any Vessels thru the strike. Some of the container shipping companys listed also ship Autos and own Passenger ships.

    You have to think, why would they self impose a strike on themselves.

    The amount of money on the table , after divided by the shippers is so very small compared to the cost of just one day of a strike. The big shippers of the USMX have to see a long term benifit to this that goes far above the ILA.

    Some believe this is a formulated situation that will weed out the smaller shippers with a long strike. That would make it all worth while to the USMX members.

  • Worker

    3dog58 you have such a narrow way to think and write that your
    opinion clearly shows the emptiness of your brain. Everything you wrote is off
    the matter, or you don’t know what you are talking about or is false. I will
    not try to refute what you said but, every American with a job has the right
    and the laws to keep it. I will try it to write something for readers so
    they understand a little more about this problem. First of all modern ships are
    larger and carries more containers than before, so shipping companies have to
    pay more today, but the personnel to load unload have not grow in the same
    proportions as the ships, so shipping companies are making more money out of
    this, also we have to add that the turnaround for a ship (time to unload and
    load) has drop almost 70%, that is more earnings for the shipping companies
    (thanks to modern equipment, computerized allocations, etc) in reality shipping
    companies are really very wealthy today, too bad that almost all of them are
    foreign companies, taking most of the earnings out of USA. The request of the
    USMX is really extensive, not only the royalties, way to extensive to talk in
    this place, but in other words they are trying to bring foreign standards of
    living to America. They see they have an opportunity to get what they want, since they see what is happening in other states where republican are taking rights out of unions. By the way I have two degrees and a several of certifications.
    Here is the list of the shipping companies:

    United States Maritime
    Alliance Members (they only have offices in USA)

    APL( Singapore)
    AtlanticContainer Line ( England)
    CCNI ( Chile)
    China Shipping ( China)
    CMACGM ( France)
    COSCO (China)
    CSAV (Chile)
    Evergreen Shipping ( China)
    Hamburg Sud ( Germany)
    Hanjin Shipping ( China)
    Hapag-Lloyd (Germany)
    Horizon Lines USA (only domestic)
    Hyundai Merchant Marine ( Korea)
    “K” Line (Japan)
    Maersk (Denmark)
    MediterraneanShipping Company (Switzerland)
    MOL (Japan)
    NYK Line Inc (Japan)
    OOCL Inc. ( Hong Kong)
    Turkon America, Inc. (Turquish)
    United Arab Shipping Company ( S Arabia)
    Wallenius Wilhelmsen Logistics, LLC (Australia)
    YangMing Corp. ( China)
    ZimIntegrated Shipping Services Company, Inc. ( Israel)

    Sorry Americans are only the workers.

    • http://www.facebook.com/walter.mattson.39 Walter Mattson

      So you have two degrees. You didn’t state what degrees you have. You also have a user name that is “worker”. Does that mean that you are a dock worker and that the pay is better than what you would make as a person with two degrees in the field of your education? The other thing you state is difficult for me to comprehend in terms of logic. It sounds like what you state is that when a company uses innovation to reduce labor costs, the union steps in and ups the fees and thus eliminates the savings since in your logic these companies are making too much money. You listed a large number of companies. They are not owned by the same investors. Thus each of these companies have to compete for the shipping or they will lose business. Apparently unions are not interested in that since unions seldom compete in the shipping business. When you as a union raise prices, the costs to all Americans go up since the shipping companies aren’t going to take the higher costs because they compete and also need to provide a profit for their investors. Who loses? The American worker. But of course why should you care as long as you continue to benefit.

  • JaxBill

    Your numbers and facts are a bit skewed. The USMX has put out a number that is a total cost including Fed. employer contributions. I make no where close to that, and work an average of 55 hours a week. Your statement of starting at $20 is incorrect. My port has a lowest pay scale of $16 an hour. Still good money, but $4 less than you claim.

    Please understand that we are not selling 2×4’s or painting your house. We work in an industry that is all about production, and we provide that very well! Non-union workers in my port have never come close to our production numbers.

    Some companys push Production to the extreme and sometimes they do put it above safety. In 29 years I have seen several bad accidents and two deaths, one I held as he passed away. We work in confinded spaces with diesel fumes. Under cranes with noise levels far above safe levels, but wearing ear plugs will get you killed.

    We are not a few executives receiving multi million dollar bonuses. We are thousands of LABOR workers, the middle class. The ones that spend in local stores and shops, the ones that pay the largest portion of income tax. Yes, we have good health care and we feel every American worker should have the same. Not have it taken away.
    By the way, how much was your last contract for?

    • 3dogs58

      Why is it that union thugs think that they are the only people in the “middle class”? You pay the largest portion of income tax? Take a look at the IRS charts Einstein, you’re not even close. No one is holding a gun to your head to stay on the job. Don’t think you’re getting paid enough to move boxes from point A to point B? Find a job that requires a skill. You might try a Right-to-work state as it seems that states that have stood up to the union a-holes have the lowest unemployment. Coincidence? I think not.