NEW YORK — The union for longshoremen along the East Coast and Gulf of Mexico has agreed to extend its contract for 30 days, averting a possible strike that could have crippled operations at ports that handle about 40 percent of all U.S. container cargo, a federal mediator announced Friday.
The extension came after the union and an alliance of port operators and shipping lines resolved one of the stickier points in their months-long contract negotiations, involving royalty payments to the longshoremen for each container they unload.
Negotiations will continue until at least midnight Jan. 28. Some important contract issues remain to be resolved, but the head of the Federal Mediation and Conciliation Service, George Cohen, said the agreement on royalties was "a major positive step forward."
"While some significant issues remain in contention, I am cautiously optimistic that they can be resolved in the upcoming 30-day extension period," he said.
The terms of the royalty agreement were not announced.
The master contract between the International Longshoremen's Association and the U.S. Maritime Alliance originally expired in September. The two sides agreed to extend it once before, for 90 days, but it had been set to expire again at 12:01 a.m. Sunday.
As recently as Dec. 19, the president of the longshoremen, Harold Daggett, had said a strike was expected.
A work stoppage would have idled shipments of a vast number of consumer products, from electronics to clothing, and kept U.S. manufacturers from getting parts and raw materials delivered easily.
Business groups expressed relief that the two sides had agreed to keep the ports open.
"A coast-wide port shutdown is not an option. It would have severe economic ramifications for the local, national and even global economies and wreak havoc on the supply chain," said National Retail Federation President Matthew Shay.
Major ports that would have been frozen included the massive terminals serving New York City overseen by the Port Authority of New York and New Jersey, and critical seaports in Savannah, Ga., Houston, and Hampton Roads, Va.
New York Shipping Association President Joseph Curto said avoiding a strike is critical "to thousands of workers who depend on port activities for their livelihood."
Other ports that would have been affected by a strike are in Boston; the Philadelphia area; Baltimore; Wilmington, N.C.; Charleston, S.C.; Jacksonville, Fla.; Port Everglades, Fla.; Miami; Tampa, Fla.; Mobile, Ala.; and New Orleans.
Longshoremen on the West Coast have a separate collective bargaining agreement.
5 THINGS TO KNOW about longshoremen negotiations
The International Longshoremen's Association and the U.S. Maritime Alliance agreed Friday to a 30-day contract extension, averting a potential strike Sunday by more than 14,000 dockworkers that could have brought commerce at major ports along the East Coast and Gulf of Mexico to a near-standstill. Five things to know about the talks:
1. PORTS INVOLVED: Boston; New York-New Jersey; Philadelphia area; Baltimore; Hampton Roads, Va.; Wilmington, N.C.; Charleston, S.C.; Savannah, Ga.; Jacksonville, Fla.; Port Everglades, Fla; Tampa, Fla.; Mobile, Ala.; New Orleans; and Houston.
2. THE DEADLINE: The contract expires at midnight on Jan. 28 now that the two sides agreed to a second contract extension. Federal mediators are involved, and the White House has urged dockworkers and shipping companies to reach an agreement as quickly as possible.
3. KEY ISSUE: A key sticking point until Friday was a Maritime Alliance proposal to freeze royalties workers get for every container they unload, which the union opposed. Federal mediators say this issue has been resolved but did not provide details.
4. GOODS THAT WOULD BE AFFECTED: A wide range of items transported in containers on ships, including things like flat-screen TVs, sneakers and snow shovels.
5. GOODS THAT AREN'T AFFECTED: Items including military cargo, mail, automobiles and perishables such as food.
Gov. Scott: Port strike could be devastating to Florida
TAMPA — Gov. Rick Scott warned Thursday that a looming strike involving port dockworkers on the East and Gulf coasts could have a devastating effect on Florida's families and its economy.
"The livelihood of thousands of Florida families lies in the balance," Scott said during a news conference call with several of the state's port executives. "Florida's largest ports could be shut down. This is an issue of not just Florida importance but of national importance."
Talks between the International Longshoremen's Association and the shipping companies broke down Dec. 18. Issues including wages are unresolved, but the key sticking point is container royalties, which are payments to union workers based on cargo weight. Federal mediators seeking to avoid a walkout of thousands of East Coast and Gulf Coast dockworkers from Massachusetts to Texas have called for a meeting between the two groups in hopes of resolving the issue before the Dec. 29 expiration of the dockworkers' contract extension.
Port officials and union leaders say that if a strike were to happen, only containerized cargo would be affected — not perishable goods or cruise ships. However, port leaders and politicians have dire predictions if such a strike were to occur.
Paul Anderson, the port director in Tampa, said "it's really important for the people in our country and our state to recognize that a strike this Saturday combined with ongoing negotiations between President Obama and Congress could be a 1-2 combination knockout punch for our nation's economy."
The New York-New Jersey ports handle the most cargo on the East Coast, valued at $208 billion last year. Florida's ports don't handle anywhere near as much container cargo, but officials say a strike would be devastating nonetheless.
Bill Johnson, Port Director for PortMiami and Chairman of the Florida Ports Council, said his port is the second largest generator of jobs and wealth in Miami-Dade County and handles the most amount of cargo of any Florida port. It provides 180,000 jobs and contributes $18 billion to the economy of Florida, Johnson said. Statewide in 2011, some 3 million cargo containers came in and out of Florida.
"The impact is really uncertain," said John Fleming, the communication director with the Florida Retail Federation in Tallahassee. "It's going to be inconvenient and expensive to divert the products."
The governor wrote a letter to President Obama about the situation, asking him to invoke the Taft-Hartley Act to prevent a possible work stoppage.
Scott said that cargo-related seaports provide some 550,000 direct and indirect jobs in Florida and contributes $66 billion to the state's economy.
"The threat to national safety and security that would result from mass closure of ports cannot be overstated," Scott wrote.
Scott said Thursday that Obama has not yet replied. He said that if the strike occurs and the President does not intervene, he will try to help Florida's ports.
"A shutdown of Florida ports is simply not an option for Florida families," he said.
Miami, along with JAXPORT in Jacksonville and Port Everglades in Miami, have the most import-export container traffic in Florida.
"We are definitely concerned about the disruption of business," said Chris Kauffmann, the chief operating officer of JAXPORT.
Tampa has some container traffic but has more fertilizer and perishable shipments — which would not be affected by a strike — so it wouldn't be as affected as other Florida ports.
Wardell Norman, the vice president of ILA Local 1402 in Tampa estimates that a strike would affect about 35 of the union's 200-person membership at that port. Container cargo only comes into Tampa one day a week, he said.
"Let's hope we avert a strike," Norman said. "Because I'm under the understanding that contract negotiations are still going on. Let's hope for an extension and we come to some agreement."
Port operators and shipping companies, represented by the Marine Alliance, want to cap the royalties at last year's levels. They say the royalties have morphed into a huge expense unrelated to their original purpose and amount to a bonus averaging $15,500 a year for East Coast workers already earning more than $50 an hour.
The longshoremen's union says the payments are an important supplemental wage, not a bonus.
The union represents 14,500 workers at more than a dozen ports extending south from Boston and handling 95 percent of all containerized shipments from Maine to Texas, about 110 million tons' worth.