By George Lauriat, AJOT The ILA (International Longshoremen’s Association) and USMX (United States Maritime Alliance), as of this writing (Sept. 5,) have broken off negotiations on the master contract that expires September 30th. The ILA, which represents some 15,000 workers spread over the East Coast from the Gulf of Mexico to Canada (14 ports) contends it wants the USMX’s best and final offer (on wage scale), while USMX counters that they are in the middle of the bargaining process and that issues like archaic work rules and pay practices (container royalties being a point of contention) haven’t hit the table. What has happened is a flood of press releases and letters from concerned parties like the AAFA (American Apparel and Footwear Association), Gemini Shippers, Waterfront Coalition, RILA (Retail Industry Leaders Association), NRF, (National Retail Federation) and others who want the two sides to sit back down before either a lockout or a strike becomes the inevitable “solution” and freight traffic grinds to a halt. Real waterfront strikes haven’t happened in awhile. There was the (10-day) lockout in 2002 of the ILWU (International Longshore & Warehouse Union) on the West Coast which resulted in President Bush under the Taft-Hartley Act intervened in the lockout by issuing a restraining order that opened up the ports, although a go-slow existed on the waterfront until Federal-mediated negotiations were resolved. There was another East Coast strike by the ILA in 1977 which was the last big labor (wildcats the exception) stoppage. The 2002 work stoppage on the West Coast cost the US billions of dollars a day and shifted millions of boxes to the East Coast, as shippers hedged their supply chain bets. With around 49% of the US boxes moving through Gulf and East ports, the ILA has leverage with waterfront management. But the 21 million teus of leverage is conditional. For nearly a year, steamship lines have already been making contingency plans (as have shippers) with the assumption that either a lockout or a strike could happen. It is also worth noting that unlike the industrial actions of a generation ago, virtually no ocean carrier is beneficially owned in the US, and can, no matter how reluctantly, skip out of the US market if it becomes financially untenable. While this is not an option for US-based port and terminal interests, there is no overriding power or vested political interest that demands the ships call. Although they (ILWU) are showing solidarity with their fellow waterfront union, the truth is that the ILWU would be the biggest beneficiary of any extended disruption. This is particularly true as the 2014 Panama Canal expansion date nears, which arguably could shift more direct calls to the East Coast from Asia – but not if labor conditions muddy the waters. The disruption would also boost non-ILA ports in the South and Gulf that have made inroads particularly in military cargo. Politically, it puts the Obama Administration between a rock and a bigger rock. It would be nearly impossible for the Administration to ignore the billion-dollar fallout from a waterfront disruption. It puts the White House on a collision course with Big Labor in an election year (Nov.6), and an early Christmas present under the tree for Paul Ryan. Virtually, none of the current ILA membership has really gone through a life altering strike (ala the 1950s/60s) nor have they been dramatically underpaid relative to their contemporaries. Would a union auto worker in Detroit, trade places with an ILA member? While there are some genuine points of concern in the master contract, a waterfront disruption, is a, lose, lose proposition for all involved. Time to get back to the table.