ILWU’s little leverage over grain companies sets contracts apart

Bill Mongelluzzo, September 4, 2014, JOC.com

 

The International Longshore and Warehouse Union’s two-year battle with grain terminals over a new contract in the Pacific Northwest highlights the major differences between contract negotiations in the bulk cargo sector and negotiations in the container shipping industry.

 

In the contract talks between the ILWU and the Pacific Maritime Association that are underway in San Francisco, the ILWU has great leverage over employers. That leverage results from the coastwide exposure container lines and terminal operators have on the West Coast. The union can shut down the entire coast and cut off more than 50 percent of the U.S. container trade to achieve its ends. This power, whether implemented or not, has made longshoremen among the highest compensated, most powerful unionized workers in the U.S.

 

The ILWU has much less leverage over the international grain companies. The negotiations with the Pacific Northwest Grain Handlers Association representing United Grain, Columbia Grain and Louis-Dreyfus began in August 2012 and included non-stop pickets at two of the terminals, armed escorts for grain inspectors and assistance by federal mediators before a contract was achieved in late August.

 

The two years of inconvenience for the grain companies had little if any impact on the negotiations, because the agreement that was ratified in late August reportedly varies little from the “last, best and final offer” the grain companies made in December 2012.

 

The ILWU fought desperately to preserve its control over hiring practices and work rules at the grain terminals — practices that it had maintained since the 1930s. However, the new contract reportedly gives employers the upper hand in determining who will work where and for how many hours at the grain terminals.

 

Neither the ILWU nor the employers will discuss details of the contract, publicly or privately. Much of the analysis of the new contract comes from a review of the contract the ILWU signed in 2012 with the EGT export terminal in Longview, Washington.

 

The grain handlers and the ILWU will not confirm how closely the new contract tracks the EGT contract. However, the employers have stated all along that they must have a contract with similar cost reductions and work rule provisions in order to remain competitive in the grain export sector. The ILWU in 2012 also negotiated a contract with the Kalama export terminal in Washington that is similar to the EGT contract.

 

The key to the ILWU’s strength in its coastwide contract with the Pacific Maritime Association  has been its control over the hiring hall. That’s where longshoremen report each day for their work assignments, and it is where the union promotes the creed that dockworkers’ loyalty is not to individual shipping lines or terminal operators, but rather to the ILWU.

 

This is of crucial importance to the strength of the union because control of the hiring hall was an important issue driving formation of the ILWU during the deadly general strike of 1934 in San Francisco. Before West Coast longshoremen were unionized, the daily choice of workers was controlled by employers. It was a tawdry environment noted for bribes, favoritism and the pitting of one dockworker against another for employment.

 

ILWU control of the dispatch hall was a major victory for the union, and is enshrined in the history of the ILWU with the same reverence that is afforded to the union’s founder, Harry Bridges.

 

In the EGT grain contract, the daily choice of “qualified” workers is made from two lists, one for shipside work and the other for landside work. According to the EGT contract, the determination of who is qualified to be on the lists “shall be made in the sole discretion of the employer.”

 

Much can be read into such an arrangement, depending upon one’s perspective. Does it ensure that only the most skilled and diligent longshoremen are on the lists, or does it allow the employers to keep off of the lists workers who they judge to be “trouble-makers?”

 

The EGT contract addresses work stoppages and picket lines in a way that members of the PMA would undoubtedly love to incorporate into the container contract — but probably never will.

 

The EGT contract states that in instances when the ILWU cannot, or refuses to, supply workers from the approved lists, the employer is free to fill those positions with supervisory personnel or workers from outside the of the approved lists. Similarly, if the ILWU chooses to honor a picket line, the employer can fill the positions for the time being with workers from outside of the lists.

 

By contrast, when a disagreement arises between the ILWU and a PMA member company, or when outside interests post picket lines at marine terminals, there is a well-defined grievance procedure. Work stops and an area arbitrator is called in to review the particulars of the dispute and to assess health and safety concerns should longshoremen cross the picket lines. The arbitrator then rules whether or not the longshoremen must report back to their jobs.

 

This procedure can take a few hours, or it can effectively end work for the entire shift. Under no circumstances can non-ILWU workers be called upon to do the work of longshoremen. This system prevents employers from arbitrarily replacing ILWU members with non-union workers. However, employers charge that the grievance process can be very costly if the ILWU uses it to “hard-time” them over issues that may or may not be related to the event that is being arbitrated.

 

When the grain negotiations began two years ago, the three companies stated unequivocally that they would accept only a contract that gave them the flexibility they needed in the hiring, staffing and assignment of labor to keep their operations competitive with the EGT and Kalama export terminals. Such flexibility extends to work hours, with employers seeking the right to work longshoremen up to 12 hours in a day, with overtime pay, when required to complete a job.

 

Wages apparently were never a major issue. The grain companies said the straight-time wage rates would be in the range of $34 to $36 an hour, with an additional $30 an hour in benefits.

 

In that respect, the ILWU grain contract in the Pacific Northwest is just as generous to workers as is the PMA contract. According to the 2013 PMA annual report, the straight-time hourly rate in the contract that expired on July 1 is $35.68. ILWU-PMA negotiations continue in San Francisco, and there have been no significant work stoppages even though longshoremen are working without a contract.

 

In another respect, the ILWU grain and container environments are also similar. The grain terminals have stated that the automated operation of modern grain terminals requires a workplace in which employers have flexibility in assigning labor so they can achieve the full benefits inherent in automation.

 

Container terminals today are also becoming more automated. The 2002 ILWU-PMA contract gave employers more flexibility in the use of computer technology. The 2008 contract gives employers flexibility to introduce highly automated cargo-handling equipment.

 

The big difference between the grain-handlers’ contract and the PMA contract, it appears, is that the grain contract eliminates inefficiencies that result from the work-rule and grievance procedures found in the PMA contract.

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