ILA Wage Scale Delegates Attempt to Kill Progress While Ignoring Significant Monetary Gains From USMX Management Reps

Iselin, NJ (September 15, 2009) - A proposal by the United States Maritime Alliance (USMX) to extend the current International Longshoremen's Association, AFL-CIO (ILA) Master Contract to September 2012, did not succeed because some 200 ILA Wage Scale delegates unanimously rejected the proposal before it could be presented to the 18,500-person union membership.


Despite one of the worst global recessions in history, including a projected container shipping industry loss of $20 billion in 2009,* and U.S. unemployment hovering at or near 10%, the USMX offer would have resulted in significant salary increases for most workers.

The proposal also would have eliminated the container royalty CAP. Eliminating the CAP could make an additional $50 million in supplemental cash benefits available for use by the ILA each year. The proposal also introduced a process to bridge the salary gap between lower and higher paid personnel.

The Wage Scale Committee, at its meeting in Orlando, FL, two weeks ago unanimously rejected the proposal because USMX would not agree to a moratorium on new technology in the ports it represents along the U.S. East and Gulf Coast waterfront. "The ability to introduce technology enhances the flow of cargo and facilitates productivity increases that are necessary to enable management to pay for improved wages and benefits," USMX Chairman and CEO James A. Capo said. "The ILA is completely overlooking the financial gains each and every member will enjoy, in order to veto any implementation of new technology," Mr. Capo added.

The contract extension would have provided for a starting rate and salary increase to $20 per hour for anyone earning less than that amount. Twelve percent of ILA labor would receive up to a $4 an hour increase as of October 1, 2009. Capo added that the wage increases originally due on October 1, 2009, would be deferred until October 1, 2010, at which time all levels would receive a raise.

Additional increases for top wage earners and those in the tiered wage progression would take place in 2012. By the end of the proposed extension, approximately 85% of all longshore workers would be earning the top wage rate of $32 per hour. Average increases over the three-year extension for most lower-tiered workers would range from $8 per hour to $11.50 per hour.

In exchange for the wage deferral, management agreed to eliminate the CAP on container royalty, making those additional funds available for use by the ILA. This means an estimated additional $50 million per year would be accessible on top of the $146 million the ocean carriers already pay for bonuses directly to longshore workers.

Other provisions of the USMX offer included:
* Increased funding for local benefit plans to ensure that every port has sufficient means to provide benefits for the term of the contract. Funding would come from new ocean carrier contributions and the use of existing funds.
* Management's reaffirmation of the basic principle of ILA jurisdiction for all crafts.
* Continuation of the managed healthcare plan available for longshore employees, their families and retirees. The plan is fully funded by the ocean carriers, except for minimal co-pays.

"USMX and its members will never give up their right to introduce new technology. It goes against all logic. The employees who may or may not be displaced by technology are well-protected under provisions of the Master Contract," Capo said. "It is unfortunate that the ILA rank and file did not get the opportunity to study the facts of the management proposal before the Wage Scale Committee voted it down. We all ultimately have the same goal-to create a strong maritime industry that can support a well-paid, well-trained labor force."

Founded in 1997, USMX is an alliance of container carriers, direct employers, and port associations serving the East and Gulf Coasts of the United States. While serving as the representative of the Management groups in Master Contract bargaining with the International Longshoremen's Association, the Alliance also articulates industry positions on regulatory and safety issues; oversees coastwide training, retraining, certification, and recertification programs; and is responsible for administering coastwide fringe benefit funds and programs.

* Drewry Shipping Consultants, London, England

Source: USMX

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