World Bulletin/News Desk
A union representing dockworkers on the U.S. East Coast and an alliance of shippers have reached a labor agreement that will avert a strike that threatened to wreak havoc on the United States' economy.
The International Longshoremen's Association (ILA), which represents 14,500 workers at 15 container ports in the eastern United States, and the U.S. Maritime Alliance (USMX) of shippers, terminal operators and port authorities, have agreed to extend their current contract by 30 days to finalize details, the Federal Mediation and Conciliation Service said in a statement on Friday.
Both sides have agreed "in principle" on the contentious issue of royalty payments for shipping containers, payments to ILA workers based on the tons of container cargo that move through a port.
The statement on Friday was light on details of the actual agreement, and the USMX declined to comment further.
The new contract does not eliminate the royalty payments, according to Benny Holland, an executive vice president for the ILA.
"The royalty will stay intact. We have worked out a formula for it," he said in an interview.
Established in 1960, the royalty payments to ILA workers are based on the tons of container cargo that move through a port. That tonnage has risen from 50 million tons in 1996 to 110 million last year, according to the alliance. Total payments last year were $211 million, according to the USMX, or an average of $15,500 per worker.
The original idea of the royalty payments was to protect longshoremen from wage losses expected as a result of "containerization," in which more and more goods are packed in the now-familiar 20- and 40-foot long boxes. Those take less manpower to off-load than the less-standardized containers they replaced.
Both sides also fought over the guaranteed eight-hour workday in the current contract and the seven-man "lashing gang." Lashing crews, or gangs, secure the cargo containers to the vessel using metal lashing rods to keep them from moving while the vessel is at sea. The maritime alliance wanted to eliminate each.
A long-term agreement has an 80 percent chance of happening by January 28, Capital Alpha Partners analyst Loren Smith said in a research note.
The agreement comes as union forces felt emboldened by recent victories by other unions across the United States. At the same time, shipping companies and port operators have been using more automation, and have seen profits shrink. The Baltic Dry index, which tracks the cost to ship materials overseas, is down 55 percent in the past year and currently at levels it hasn't been in a decade.
'Just as we brought back Nadiya, we will bring back Donbas and Crimea under Ukraine's control,' Petro Poroshenko says
Germany and France have apparently teamed up to hold back NATO and EU ambitions in Libya
Israel frequently carries out sweeping arrest campaigns targeting ‘wanted’ Palestinians in West Bank and East Jerusalem
'Long awaited good news, that the EU celebrates together with her country,' foreign policy chief Mogherini says
German chancellor says 'maybe some issues will require more time,' but the EU 'will stick to the agreement'
Ukraine swaps two captured Russian soldiers for the jailed pilot Nadiya Savchenko
'The existence of this government brings a real threat of instability and extremism in the region,' a senior Palestinian official says
Several civilian deaths and shortage of medical supplies reported as army continues push to retake ISIL-occupied city
'A teacher has the right to demand a handshake,' Basel-Country ducation authorities rule
Kenyan forces have been operating under African Union Mission in Somalia since February 2012
The veteran leader Rachid Al-Ghannouchi says that Ennahda Party is 'evolving with Tunisia'
The meeting will mainly focus on South China Sea disputes and fight against terrorism
The loan aims to cover the cost of reforms intending to improve the business climate in the Balkan country, resume the privatisation and restructuring of public enterprises, and slow down a rise in public debt
Ahead of rumored ‘savage’ inquiry into his conduct, former British PM admits mistakes were made in Iraq war
The Democratic Party frontrunner maintains small margin in national poll
Eurozone finance ministers reached a vital deal with Greece after marathon talks to unlock 10.3 billion euros in bailout cash and start debt relief