Dockworkers recently returned to work at the East Coast's largest port, but not all is well at New York and New Jersey cargo terminals.
Over the weekend, January the Waterfront Commission of New York Harbor (WCNYH) launched an investigation into the walkout at port terminals in New York and New Jersey. The commission has called the walkout "illegal." Even the International Longshoremen's Association's (ILA) president is not pleased with the dockworkers' decision. The surprise strike was sudden and disruptive, leading to anger among many port officials in the area.
Reason for the walkout unknown
The reasons behind the walkout are still unclear, and there is little that can be publicly revealed about them at this time, other than the fact that the action was not sanctioned by local union representatives and dockworkers have become increasingly frustrated with the WCNYH's "intrusions," according to NJ.com. Harold Daggett, president of the ILA, noted that he was "furious" upon his discovery of the strike.
"Walkouts could throw wrench in the fine-tuned gears that keep the ports moving."
The affected ports have since returned to normal operations, but the WCNYH's investigation could cause some dockworkers to lose their work licenses. Union members and the New York Shipping Association (NYSA) have not always responded well to the commission's regulations. The two groups believe the WCNYH's actions have delayed hiring and present labor shortage risks. The commission was formed to fight corruption and mob ties at New York and New Jersey terminals.
"The next step is obviously to sit down and try and resolve the outstanding points," Beverly Fedorko, NYSA spokeswoman, told NJ.com. "We can't get into the specific details of the discussions, but they all have to do with work preservation."
Strikes can be significant setbacks for shippers
The strike and potential future walkouts could have a significant economic impact due to the sheer amount of cargo the ports handle annually. The goods that go through the terminals each day follow a tight schedule to prevent delays. Walkouts could a throw wrench in the fine-tuned gears that keep the ports moving. The National Retail Federation (NRF) decried the strike and called it "troublesome" in a letter to Daggett and David Adam, the chairman and CEO of the United States Maritime Alliance (USMX), which represents employer groups in coastwide contract negotiations.
The ILA and USMX have floated an early start to contract negotiations – their current deal is set to expire in 2018, according to the Journal of Commerce (JOC). Ensuring that these early discussions proceed without issue is important for shippers, whose cargo depends on normal daily operations.
"While we applaud your decision to engage in early contract negotiations, these discussions need to happen without the kind of disruption that occurred last week," Matthew Shay, the president and CEO of the NRF, explained in the letter.
The ports of Los Angeles and Long Beach suffered extensive setbacks during contract negotiations. The recent walkout likely made it clear how important it is for the union and employers to avoid contentious contract discussions, if that was not apparent enough, following the negotiations between the International Longshore and Warehouse Union (ILWU) and the Pacific Maritime Association (PMA). Contract talks between the West Coast organizations in 2014 and early 2015 led to congestion and delays that affect Pacific ports to this day. Many shippers ended up re-routing their cargo to East Coast terminals to avoid setbacks.
East Coast port officials in all likelihood want to avoid similar issues ahead of the 2018 contract expiration. Discovering the root of the recent walkout will be a step toward preventing crippling congestion at New York and New Jersey terminals in the coming years.