NEW YORK A recent breakdown in negotiations between the
International Longshoremens Association (ILA) and the
U.S. Maritime Alliance Ltd. (USMX) could incite a strike that
would affect containerized cargo shipments at ports from Maine
Unfortunately, master contract negotiations are not
progressing well, and it is expected that there will be a
coastwide strike beginning 12:01 a.m. on Sunday, Dec. 30,
ILA president Harold Daggett said in a Dec. 19 letter on the
Orders to handle containerized cargo shall not be
honored under the strike, Daggett said. The union is
making exceptions for unfrozen perishable commodities,
containerized mail, passenger ships, containerized military
cargo excluding household goods and non-containerized cargo and
automobiles, Daggett said.
If it goes into effect, the strike would affect about 15,000
workers, according to a union spokesman.
Players in the metals and shipping industry were watching the
developments with caution Friday, noting that signs indicate a
strike is likely at this point.
The odds of a strike are very high, simply because they
met last week and did not come to a resolution, Nathan
Weseley, president of the West Gulf Maritime Association, told
However, the union spokesman cautioned against any hasty
The contract does expire at the end of Dec. 29, so we
still have time, he said. We wont know until
theres no contract on the 29th.
Nonetheless, there are no further discussions scheduled at this
time, he told AMM Friday.
Were waiting to hear back from USMX and the Federal
Mediator, he said.
If implemented, the strike would affect container traffic at a
number of key ports, including New York, New Jersey,
Philadelphia, New Orleans, Baltimore and Houston.
Pretty much every large port would be affected,
Weseley said, adding that every industry will likely see some
effect. In these days of globalization, what
wouldnt be impacted?
Metal industry participants said they are making preparations
for the possible strike ahead of the approaching contract
Some shippers are already exploring the possibility of
delivering export loads to Canadian ports, warehousing
company C. Steinweg (Baltimore) Inc. wrote in a letter to its
customers dated Dec. 21. It added that most carriers have
established congestion surcharges that will be imposed at all
U.S. ports depending on the level of disruption and delays that
may be caused by any work stoppages or delays.
One scrap market source estimated the range of possible charges
at between $700 and $1,000 per container.
A strike would likely hit the nonferrous scrap export market
particularly hard due to its reliance on containers, sources
What I can see happening (is that) this will hurt the
nonferrous export market, especially trades to Asia where they
have a high demand for coppers and other metals, a second
market source said.
An importer of scrap based in India suggested that a freeze on
containerized ferrous scrap exports could push up volumes of
bulk scrap exports, as these would not be affected by the
But while some are making preparations, other say they
dont expect the potential strike to have a large
If the ILA were to strike, theres plenty of other
contractors here that can work the cargo, Jimmy Lyons,
director and chief executive officer of the Alabama State Port
Authority, told AMM. His port exports about 100,000
tons of finished steel in containers annually, he said.
The 14 ports on the East and Gulf Coasts that could be affected
by a strike carried 110 million tons of import and export cargo
in 2011, according to USMXs website.
According to Weseley, one of the main points of contention
between the ILA and the USMX during this round of negotiations
is on the issue of container royalties, which are paid by
carriers to the union for containerized shipments.
While USMX is seeking to keep royalty payments at 2011 levels
for current recipients and exclude new members from the
payments, the union considers the issue
untouchable, according to a statement posted on the
union website following a breakdown in talks Dec. 18.
If the strike begins, President Obama can order an injunction
that would give the parties an additional 80 days to reach an
agreement, Weseley said.
A number of large shipper groups have already appealed to
the White House to take early action to impose Taft-Hartley
action to impose a cooling-off period and stop any work
interruptions, Steinweg said in its customer letter.
But whether Obama would choose to do so remains unclear.
The strike raises an interesting political dilemma for
Obama. I cannot imagine that he would not order them back to
work, but he is obviously very pro-labor, so I would not expect
him to do this right away, a third market source said.