SAINT SIMONS ISLAND, GEORGIA (FEBRUARY 8, 2016) – Shipping line executives say the late January wildcat strike at the Port of New York and New Jersey by International Longshoreman’s Association workers could complicate an extension of the six-year deal between the ILA and the United States Maritime Alliance (USMX). The current deal, which expires in 2019, provides a master contract between port operators and labour unions on the US East and Gulf Coasts.

Reasons for the strike remain unclear, and ILA leaders quickly urged workers to return to their jobs.

William Payne, vice chairman of NYK Line (North America) notes that some reports suggest that the strike was a result of “pent-up frustration” with the Waterfront Commission of New York Harbor. “If we take that first sound byte as one of the issues, it becomes a New York/New Jersey issue” rather than a sign of widespread labour unrest among the US East Coast and Gulf Coast dockworkers, said Payne, speaking at the Georgia Foreign Trade Conference. 

“Nonetheless, it runs contrary to the spirit and the letter of the collective bargaining agreement of no strike-no lockout, [and] that’s unacceptable to the carrier base. We have to forge ahead and get through that, because whether it’s an extension or a current contract, no strike-no lockout should be no strike-no lockout,” he said. “Does it make sense going forward on an extension? We’ll have to see, but I think [the wildcat strike] is a contaminant on the East Coast.”

David Arsenault, president and CEO of Hyundai Merchant Marine America and Hyundai America Shipping Agency, told the conference that labour plays a vital role in the overall supply chain. “I think last year, where we saw the congestion and the disruptions on the US West Coast, we certainly saw that the supply chain will find the path of least resistance. It’s just the way supply chains work, and we saw a significant diversion of cargo to the US East Coast as a result.”

The significance of that diversion, he says, was an eye-opening experience for all industry stakeholders, including labour, in the overall supply chain. “Because of that, it certainly seemed to promote some type of a contract extension here,” he said.

Fabio Santucci, president of Mediterranean Shipping Company, told the conference that “anything is possible” when the ILA and USMX are at the bargaining table. “The issue is that as an industry, we cannot afford to run into the issues that we saw last year, especially with the weakening demand overseas and with all the issues that are coming up. It’s going to damage our industry in a more solid, dangerous way than we saw before,” he said.

Santucci called for an understanding that the industry in the US must continue to improve its efficiency. “We have a great deal of respect for the ILA. They really work hard. But at heart, [the industry] should be increasing efficiencies to allow us as a country to compete in the coming years,” he said, saying that more efficient re-routing options are becoming available in Canada and Mexico.

“Nobody, including the shippers, want to go that route, but they will be forced to go that route if we are not efficient,” Santucci said.