***Change at the ILA

JOSEPH BONNEY

1388 words

8 August 2011

Journal of Commerce Online

JOCO

Journal of Commerce - Print and Online

CTGJOC

English

(c) 2011 Commonwealth Business Media. All rights reserved.

As Harold Daggett basked in the applause of union delegates after his election as International Longshoremen's Association president, loudspeakers came alive with the Sam Cooke classic "A Change Is Gonna Come."

Shippers and carriers using Atlantic and Gulf Coast ports may see more change than they'd like with Daggett's election. The new ILA president took office July 28 vowing an aggressive approach to day-to-day labor relations and the union's next contract negotiations.

In a pugnacious 47-minute acceptance speech, he pledged to fight automated terminals, enforce container weight limits, put chassis pool operators on a short leash, organize workers at Caribbean transshipment ports, tighten safety standards, unify the ILA's diverse factions and work more closely with the West Coast dockworkers' union.

"We are against automation in the United States on the East Coast and West Coast," Daggett told dockworkers. Automation "takes away jobs and takes away money from your family. I'm not going to let that happen. I'm going to fight it."

How closely the ILA's bite matches Daggett's bark will become clearer when the union opens negotiations, likely this fall, with United States Maritime Alliance on a coastwide master contract to replace the agreement that expires Sept. 30, 2012.

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The ILA hasn't had a coastwide strike since 1977. During the last 25 years, the union has cultivated a cooperative approach to match the low-key styles of Daggett's predecessor, Richard Hughes, and John Bowers, who headed the union from 1987 to 2007. That's been in stark contrast to labor relations on the West Coast, where a series of confrontations between management and the International Longshore and Warehouse Union led to a 10-day lockout in 2002 that still echoes across through the shipping world.

This year, however, the ILWU is talking about cooperation, competition and productivity while the ILA is taking an assertive stance.

Daggett insists that doesn't mean confrontation. "The ILA has a long tradition of working with management to allow continued growth for both labor and management — let me repeat, labor and management, not just management," he said. "We will continue that relationship in the upcoming negotiations."

But Daggett's positions on automation, chassis and other issues clash with management's insistence that East and Gulf Coast terminals need freedom to adopt labor-saving technology. The current ILA-USMX contract allows unrestricted use of technology on six months' notice but allows the union to negotiate the impact on jobs.

USMX Chairman James Capo wouldn't comment on Daggett's speech but earlier told ILA delegates the union and management must work together to improve productivity to win and retain cargo and attract infrastructure investment.

Capo said ILA pay, including bonuses from carriers' container royalties, averaged $71,500 last year while benefits averaged $46,500, for a total of $118,000. ILA benefits include one of the most generous medical plans of any industry.

Daggett said the benefits package "is important, and management tries to have us focus solely on it, but it's our jurisdiction that affects not only our jobs but our future."

He said automation affects longshore jobs the same way E-ZPass affects highway toll collectors. He said employers promise, "Oh, you're going to have plenty of jobs, we're going to create jobs. Bull----!"

Daggett goes beyond generalities: He said Hampton Roads, Va., dockworkers would reject their existing automated terminal if it were put to a vote today.

Daggett came up through the ILA's New York-New Jersey maintenance and repair local and takes a close interest in chassis. He rattled the industry last fall by declaring "war" on any container lines seeking to circumvent ILA jurisdiction by transferring equipment to third-party chassis pools.

Hostilities over chassis were averted when pool operators Flexi-Van and Trac Intermodal pledged to continue to hire ILA labor for M&R work now done by union labor, even though they're not bound by the coastwide master contract signed by carriers and terminal operators.

Daggett said he wants to tie chassis pools more securely to the ILA by bringing pool operators under the ILA-USMX contract. "They've got no responsibility to us," he said. "If they ever want to pick up and leave, we're out of work."

He linked the chassis issue to underreporting of weights on imported containers, a practice he said shortchanges the ILA on tonnage-based container royalties. He said export boxes are weighed before loading but import manifests often are inaccurate.

Daggett said this raises safety issues and that he would insist all containers be weighed before leaving terminals and require overweight containers to be stripped and reloaded by ILA labor. "If they want to play games, we'll play games," he said.

"I'm going to make sure that those chassis come back to the pier where they belong and that's the way I'm going to do it legally — and I'm going to put containers back on the pier," he said. Terminals pleading lack of space for on-pier stripping and stuffing had "better make room, or … tell these chassis pools they'd better sign a master contract with the ILA."

He said added royalties from enforcement of container weights could support a strike fund ILA convention delegates authorized but did not earmark money for.

ILA finances have been sagging under high overhead, declines in membership and wage-based dues, reduced investment income and, until recently, the costs of defending the union against a civil racketeering lawsuit filed by the Justice Department. The lawsuit seeks to oust Daggett and other top officials and place the ILA under a federal monitor. Refiled in 2007 after being dismissed, it has been dormant in U.S. District Court in Brooklyn for more than two years.

Related: Quiet on the Coalition Front .

Despite additional revenue from the end of caps on container royalty payments by carriers, the international union's assets declined to $12.8 million this year from $15.5 million in 2010 and $51.1 million as recently as 2005.

Daggett told local and regional officials he wants to settle more grievances without bringing in lawyers. "When the attorneys get it, cha-ching, cha-ching, cha-ching, they're on the clock, the money starts," he said.

Although Daggett is supported by members of the Longshore Workers Coalition, a faction that has criticized previous union administrations, he said a top priority will be to "get our house of ILA labor back together so we speak with one voice. We cannot have a union within a union."

He said he would prohibit local officials from agreeing to concessions without approval from headquarters and seek to include Puerto Rico in the ILA's Atlantic and Gulf master contract talks to prevent companies from playing the island's ILA locals against each other.

Daggett said the ILA would seek to organize port workers at Freeport, Bahamas, and other non-U.S. transshipment hubs where shipping activity is expected to increase with the opening of wider locks at the Panama Canal.

He said the union would work with the ILWU and International Transport Workers Federation to organize workers "up and down the logistics chain" and prevent encroachment on ILA jurisdiction by unions such as the Teamsters, seafarers and operating engineers.

The ILA will match management research on economic conditions before opening contract negotiations, Daggett promised. "We're not going in there empty-handed," he said. "We're going to know how much money each line has made the last three years … For every slide they make on economic points, we'll have two, three, four slides."

Daggett said he would pursue closer ties with the ILWU. "It is my intention to bring the ILA closer to the ILWU, as we have many matters of mutual interest in dealing with management in protecting our jurisdictions and memberships," he said.

He said he would ask ILWU President Bob McEllrath to observe the next round of ILA negotiations. Listening to Daggett's convention speech from the audience, McEllrath shouted, "I'll be there, because we are one."