In the end, automation wasn’t the issue that brought the ILA to the brink of a work stoppage. In July, USMX CEO James Capo said the sides had reached a tentative agreement on terminal technology. Having given ground on the issue, though, USMX demanded concessions.
In the early days of containerization, the ILA struck a sweetheart deal. Recognizing that the new container cranes would vastly reduce the need for longshoreman labor, the union demanded and won a guarantee that the workers would not lose their jobs to the new machinery. For decades, that meant longshoremen got paid for a set number of hours regardless of whether their labor was required. While the workers who received those early guarantees are gone from the waterfront, the principle remains intact, with pension plans and bonuses funded by royalties based in part on the weight of containers that cross the terminal.
Other rules vary from port to port. To operate a ship-to-shore crane in New York and New Jersey, management is required to employ three crane operators, though only one works the crane at a time. Shop stewards, meanwhile, get paid whenever a member of their craft is on the clock, no matter where the shop steward is or what he’s doing—an arrangement that allowed Ralph Gigante, a relative of former Genovese family boss “Vinny the Chin,” to earn more than $400,000 in 2009, and allows ILA timekeepers to be paid for more than 25 hours in a day.
“The one advance with which the ILA can be credited is the discovery of quantum economics,” said Matt Yates, director of commercial operations for American Stevedoring Inc., which operated a container terminal in Red Hook until last year. “It’s where workers are being paid by different companies at the same time, when they’re at none of the workplaces.”
(Still, as Sopranos capo Christopher Moltisanti once put it, “This no-show shit is hard—deciding what not to wear to work, what not to put in my lunchbox …”)
In August, having compromised on automation earlier in the summer, management insisted that the union give ground on work rules, including pay practices and guaranteed hours in the Port of New York and New Jersey. Mr. Daggett dug in, calling a halt to negotiations and threatening a strike.
On a recent afternoon, The Observer stopped by the Port Newark Container Terminal, owned in part by former AIG subsidiary Highstar Capital. Orange ship-to-shore cranes danced a mechanical ballet, lifting containers off a Moravian vessel called the Jennifer Rickmers and setting them ashore, from where a platoon of $1 million “straddle carriers,” piloted by longshoremen perched in cockpits two stories high, sorted the boxes along the docks.
As we headed toward the cranes, we asked our guide about a pile of scrap metal towering over the terminal. The junk, it turned out, is the biggest export from the Port of New York and New Jersey—that is, if you don’t count empty containers. Waste paper and used clothing are other big exports. “To some degree, we’ve become a colony to the manufacturing nations of the world,” Thomas Wakemen, the deputy director of the Center for Maritime Systems at Stevens Institute for Technology in Hoboken, told us. “The world has changed.”
At the docks, change may need a little longer to take hold. Although the 90-day extension announced last week moved a potential work stoppage past the presidential election, the core issues remain. The ILA must defend its jobs. The terminal operators still need to cut costs.
Shmuel Yahalom, a professor of economics at SUNY Maritime, threw up his hands when asked what the economic impact of a strike would be. “The price tag on a work stoppage is almost too big to determine,” he told us, adding that the East Coast is more densely populated and utilizes more ports than the West Coast. Start with the billions of dollars a day the work stoppage on the West Coast waterfront caused in 2002, and estimate upward.