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Shippers Hail Right to Modernize, But Gain Offset by Richer Pensions

Shippers Hail Right to Modernize, But Gain Offset by Richer Pensions


Staff Reporter

The proposed contract between dockworkers and the shipping lines offer something for both sides: financial security for the union and the promise of more efficient operations for the shipping lines.

Although on paper it looks like the International Longshore and Warehouse Union got more than the Pacific Maritime Association, management is nonetheless hailing the agreement on new technology as the first step in a longer-term process to make the ports more efficient.

“This contract positions the ports to modernize over time, which is critical to increase capacity so we can handle the increase in traffic over the next five to 10 years,” said Steve Sugerman, a PMA spokesman.

But it will cost the shipping lines to do that.

The agreement’s pension increases, as well as the cumulative effects of rising health care costs, will be so expensive that both sides agreed that they needed a six-year rather than the standard three-year contract to spread out the effects of the increases. All told, the PMA has committed additional hundreds of millions of dollars annually for union members.

One example: The shipping lines backed down on their attempt to reduce health benefits due to rising premiums. By continuing to pay $42,000 per year for each of the 10,500 union members, the shipping lines will be paying an estimated $500 million annually by the end of the contract, up from the current $220 million.

Pensions for each employee who works a minimum of 35 years will increase to $63,000 per year by the end of the contract, up from the current $39,900, while the base rate pay for longshoremen will increase $3 per hour by July 2008, to $30.68.

“We were more concerned with our pensions,” said Steve Stallone, communications manager for the ILWU. “(Six years) seemed necessary when costing out the pension increases for the PMA to be able to pay for the costs as we were asking them to be.”

In return for all this, the shipping lines will now be able to implement computerized container tracking and work assignment systems, as well as optical scanners and remote cameras that record truck license plate and container numbers. This will speed up the time it takes for drivers to enter and leave the ports.

The PMA membership tried and failed to get similar technology agreements during the 1999 and 1996 contract negotiations.

Ready to go

Some facilities are already wired up and were waiting for the contractual green light, while others might not have automated systems in place for two or three years.

Container traffic moving through West Coast ports each year is expected to double over the next decade from its current $300 billion annual figure, and more advanced operations are considered critical to meet that demand.

The ILWU caucus is expected to recommend this week that the contract be approved by the rank-and-file, which would vote on the contract later this month or early January.

The labor saving technology will reduce the union’s membership as workers retire in the decades to come. But for the short term, the 400 or more maritime clerks losing their positions will be retrained for other work as part of a guarantee that all unionized dockworkers will have a job until retirement.

Meanwhile, their numbers could temporarily increase because the agreement calls for all non-unionized vessel, rail and yard planning work to be placed under ILWU jurisdiction.

“The way it’s set up is if there is not work for them to do, they get paid anyway,” Stallone said of the maritime clerks. “The point here is that not a single person is losing his job.”

Other jobs hit

The same cannot be said for the 100 or so non-unionized out-of-state logistics planners who will lose their jobs under the agreement that brings those responsibilities under ILWU jurisdiction.

Thirty of the 37 Stevedoring Services of America Inc. employees filed an injunction request on Nov. 19 with the National Labor Relations Board to block the PMA-ILWU agreement.

The Salt Lake City, Utah-based SSA workers claim the ILWU-PMA agreement is illegal because it is costing them employment because they are not union members.

“(The agreement) makes the need for NLRB action more urgent,” said Stefan Gleason, vice president of the National Right to Work Legal Defense Foundation, which represents the SSA employees. “As soon as the agreement is ratified, the jobs are in imminent danger of being eliminated.”

The foundation also plans to ask the NLRB’s legal counsel to file a request in U.S. District Court to delay shutting down the SSA and other non-union operations until the NLRB can make a final ruling on the matter.

The ILWU, which maintains that the work should have been under union jurisdiction all along, has no intention of offering those workers a job on the docks.

Prospects for the SSA employees’ prospects are considered bleak, if for no other reason than the NLRB and federal mediator Peter Hurtgen, who played an integral role in the negotiations, are presidential appointees.

“It’s highly unlikely they are going to contradict each other,” said Peter Olney, associate director for the University of California Institute for Labor and Employment. “The (Bush) administration has too much at stake to pay attention to this kind of marginal lawsuit.”

Although NLRB officials said they are making the case a “top priority,” they had little else to say because their investigation was just getting underway.

“All we have are the bare charge documents,” said Wayne Benson, the NLRB’s Denver-based assistant regional director. “We have zero evidence. It’s just too premature to do any speculation at this point.”

Port Scorecard

Contract gains made by the International Longshore and Warehouse Union:

– Maintained $42,000 per year in health benefits for each worker.

– Increase in pension to $63,000 per year for 35-year employees, up from the current $39,900.

– A $3 increase to the current $27.68 hour base pay rate.

– All non-unionized vessel, rail and container yard planning work will be brought under ILWU jurisdiction.

– A guarantee that all unionized dockworkers will have a job until retirement.

Gains made by the Pacific Maritime Association:

– The 80 ship lines and terminal operators may implement labor-saving technology to make West

Coast ports run more efficiently.

– Companies are not required to fill positions after current active maritime clerks retire.

Source: ILWU, PMA

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