Freight Flow Continues as US Container Shipping Strike Postponed Whilst Turkish Dispute Continues

US – TURKEY – Two entirely different moods seem to be in place this week as industrial relations problems on opposite sides of the globe develop. Whereas in September it seemed an impasse had been reached between the International Longshoremen's Association (ILA), representing the dock workers, and the U. S. Maritime Alliance (USMX), whose principals include representatives of just about all the major container shipping lines, the two sides are currently said to be involved in useful dialogue which has averted the immediate threat of a US East coast freight strike whilst in Turkey the tone is distinctly more pessimistic.

Way back in May the signs were there for all to see as government action to prevent a strike at Turkish Airlines resulted in the subsequent dispute which saw 305 staff at the company sacked. The protests which followed seemingly achieved short shrift and pickets have now been in place for several months at Istanbul’s Ataturk Airport but on Christmas Day thirteen more of the sacked workers won their Court cases for reinstatement making the total now backed by the judiciary to twenty six staff who have been dismissed illegally. Atilay Ayçin, president of International Transport Workers Federation (ITF) affiliate Hava-Is, the Turkish civil aviation union said:

“This court verdict shows the importance and value of workers’ unity and international solidarity and sends a strong message to all workers to continue to fight for their rights!”

The US East Coast dispute continues although an all out strike has now been delayed again, this time until February 6, 2013. It appears from comments made by both sides that feelings are mellowing but the sticking point to a long term agreement seems to have been the subject of ‘Container Royalty’ payments, a problem which it seems may now have been resolved. The USMX explains exactly what this term means historically and why its members object so much to paying it saying:

“The first container royalties were established in 1960 as a way to protect members of the International Longshoremen’s Association in New York from job losses created by containerization and its introduction of automated cargo. In the more than half a century since, container royalty payments to ILA workers, not only in New York but at all the East and Gulf Coast ports, have increased dramatically, reaching over $211 million in 2011 alone. Not all of that money ends up in the pockets of ILA members; their union gets 10 percent – $21 million last year – through a checkoff from each member’s royalty payment.

“The initial reason for implementing container royalties – to protect ILA members from the loss of work – has long been forgotten. Today, thousands of workers who were not even born in 1960 – or in 1968 when container royalties were first distributed – continue to receive payments that in 2011 averaged $15,500 for ILA workers at the 14 East and Gulf Coast ports.

“Unlike the Port of New York and New Jersey, then and now the predominant port on the East Coast, ILA workers at ports like Savannah and Charleston saw their job opportunities grow because of containerization. The container royalties they receive have been a bonus that has nothing to do with any adverse job impact caused by containerization. The dramatic increase in royalty payments resulted from a combination of two factors – the reduction in the number of ILA workers and an increase in the tons of container cargo – from about 50 million tons in 1996 to 110 million in 2011.

"With fewer workers and more tons, royalty payments, which are based on the weight of containerized cargo, have increased over the years. In the 14 years ending Sept. 30, 2011, the payments totalled $1.8 billion. In Savannah alone, they increased from $6,028 in 1996 to nearly $36,000 per worker in 2011.

"In reality, container royalties have morphed from an assessment imposed through arbitration in 1960 to what they are today – another form of compensation for ILA workers, who are among the nation’s most highly compensated. The vast majority of ILA workers were not alive when containerization was introduced in New York in the late 1950s. In fact, only 136 of the 3,281 ILA workers at the Port of New York and New Jersey today were working at the port in 1968, the year container royalties were first distributed.”

USMX goes on to state that in the current negotiations over a new Master Contract, management is not asking to eliminate container royalties, only to cap the payments and use the excess, not as savings for employers but to help pay for other benefits for ILA workers and it seems that this argument has now been partially accepted by the union with ILA President Harold J. Daggett pronouncing satisfaction with recent progress on the sticking point whilst George Cohen, Chairman of the Federal Mediation and Conciliation Service (FMCS) said when announcing the latest stay of execution:

"I am extremely pleased to announce that the parties have reached the agreements (set forth below) as a result of mediation session conducted by myself and my colleague Scot Beckenbaugh, Deputy Director for Mediation Services, on Thursday, December 27, 2012.

"The container royalty payment issue has been agreed upon in principle by the parties, subject to achieving an overall collective bargaining agreement. The parties have further agreed to an additional extension of 30 days during which time the parties shall negotiate all remaining outstanding Master Agreement issues. The negotiation schedule shall be set by the FMCS after consultation with the parties."

"Given that negotiations will be continuing and consistent with the Agency's commitment of confidentiality to the parties, FMCS shall not disclose the substance of the container royalty payment agreement. What I can report is that the agreement on this important subject represents a major positive step toward achieving an overall collective bargaining agreement.

"On behalf of our Agency, I want to thank the parties, especially ILA President Harold Daggett and USMX Chairman & CEO James Capo, for their ongoing adherence to the collective bargaining process, which has enabled them to avoid the imminent deadline for a work stoppage that could have economically disruptive nationwide implications."

Photo: Member of the European Parliament, Evelyn Regner visiting the Hava-Is union picket line. Current details of the Turkish Airlines dispute can be seen on an ITF sponsored website HERE.