PrintPrintThe largest customer for the Port of Charleston said it will leave if it can't renegotiate its contract, which could cut a number of union jobs.
By Molly Parker
mparker@scbiznews.com
Maersk Lines’ attempt to rewrite its contract with the S.C. State Ports Authority is threatening to dust up a labor dispute that could span the East Coast.
Grappling with budget woes, the Danish shipping line, the world’s largest, has been in negotiations for the past year with the SPA, seeking a reprieve from its current five-year license agreement, which expires in 2010.
Maersk accounts for almost a quarter of the SPA’s container business, making it the largest shipping line calling on the port. If the company stopped calling on the Port of Charleston, it would have a major impact on the Lowcountry.
One option SPA executives have offered is to move Maersk to a “common-user gate” utilizing SPA employees. Maersk is a licensed private operator on the Wando Welch Terminal, and its labor is supplied by the International Longshoremen’s Association, according to an international labor agreement.
|
| • Maersk is the world’s largest shipping line and the Port of Charleston’s biggest customer, accounting for nearly 25% of the S.C. State Ports Authority’s business. • Maersk has been calling on the Port of Charleston since at least 1953. • At any one point in time, Maersk Line is transporting cargo worth approximately 3% of the world’s GNP, which in 2005 was $36.3 trillion. • In 2007, Maersk Line made about 41,500 port calls — equivalent to approximately five port calls per hour, or one call every 13 minutes. • If all the Maersk Line containers were stacked on top of each other, they would reach approximately 2,500 kilometers high, the equivalent of stacking 8,550 Eiffel Towers on top of each other. • In May, the company completed a reorganization plan that eliminated 3,000 positions, or roughly 15% of its employees • An uptick in its shipping business during the first half of the year led AP Moller-Maersk Group to change its economic outlook for the year to a net profit range of $4 billion to $4.6 billion from the originally projected $3.6 billion to $4 billion. |
This is controversial because it would eliminate several dozen union jobs, and further shrink the union’s role at the publicly-owned port.
“We understand that the ILA does not wish to see a reduction in their numbers, however any impact on the ILA from a move to the common yard would be far less than the impact of Maersk Line’s withdraw from Charleston,” Maersk spokesman Dana Magliola wrote in an e-mail.
Maersk estimates the loss of union jobs from such a move to be 33, while the ILA says it would be closer to 50.
ILA labor works roughly 3,400 hours weekly, servicing both the dedicated and common yard facilities at the Port of Charleston, Magliola said. That number could shrink considerably without Maersk, which accounts for nearly a quarter of the SPA’s container business.
ILA Local 1422 President Ken Riley said his organization would fight any move that would take away union jobs.
“It also would be in violation of an international contract,” Riley said. “This is a national law. It would actually jeopardize the relationships between Maersk and the ILA up and down the coast.”
Magliola said Maersk officials are currently in negotiations with the ILA to work out a compromise, and that it favors the common-user gate to the “alternative higher-cost, noncompetitive dedicated facility.”
Riley remained unfazed by Maersk’s public statement. He said that, at the end of the day, Maersk is unlikely to move to the common-user gate. He chalked up the company’s statement to political posturing. The SPA, he said, could eliminate the problem if it dropped the “shortfall fees” Maersk’s contract calls for when the company fails to hit certain volume numbers.
“We work with these people every day. We sit across the table on a daily basis,” Riley said. “They do not want to move to the common-user gate. I can tell you that’s not the case.”
Riley said SPA executives have made this a union issue by attempting to force Maersk into the common yard.
Bernard Groseclose, chief executive of the SPA, denied that was the case. The SPA also offered Maersk the option to remain as a licensed user on the terminal if the company agreed to shrink the space it utilizes and return some of the equipment the SPA provides the company per its contract, he said.
The company does not have a deadline for reaching an agreement, Magliola said, but he noted that reaching accord quickly is essential.
The union issue is particularly sensitive in the Southeast, where ports generally are operated by government entities utilizing a chunk of nonunion labor. Across the country, most ports are operated by private companies using ILA labor.
At the Port of Charleston, most of the labor is unionized, but about 370 SPA employees who don’t belong to a union handle half of the terminal gate operations — those in common-user yards — and all container-lifting equipment.
Riley said the Port of Savannah has agreed to drop its “shortfall fees” against Maersk, but Maersk declined to verify this statement, saying any discussions with other ports are separate from talks with the SPA.
“Regardless of any contractual situations in Savannah, the only issue facing an agreement between the S.C. SPA and Maersk Line regarding our continued presence in the Port of Charleston is the approval by the Charleston ILA of a plan to move our operations to the common yard,” Magliola said.
The company does not have a deadline for reaching an agreement, Magliola said, but he noted that reaching accord quickly is essential.
Reach Molly Parker at 843-849-3144.
Print