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Ports in United States Aiming to Control Costs

Some of the highest-paid blue-collar workers in the country are dockworkers. The average dockworker makes over $115,000 per year, according to Reuters. Shipping companies are trying to control costs now and this includes the cost of labor. The workers are not giving in though as they are pushing back against the companies.

United States ports have become more automated over the past couple of years, but the productivity at the ports continues to lag compared to overseas ports. Less than five dockworkers are used at ports in Shanghai and Rotterdam to do the same amount of work that 20 dockworkers in U.S. ports are needed to perform.

In December, office workers at ports in Long Beach and Los Angeles, California went on strike for eight days regarding a dispute over outsourcing jobs. The dockworkers at those ports did not want to cross the picket lines, which is why some of the largest shipping ports in the country were shut down for that time frame.

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The International Longshoremen’s Association (ILA) represents 14,500 dockworkers on the Gulf and East coasts. The U.S. Maritime Alliance (USMX) represents terminal operators, shippers, and port authorities in the country. These two organizations agreed to a temporary deal on December 28 with a strike looming. If the talks do not lead to a final deal to be ratified by workers on February 6, a strike is still very possible.

In the negotiations, a problem arose with royalty payments made to ILA workers based on the tons of cargo that come into the port. The payout amounted to $211 million in 2011, according to USMX. This is an average of $15,500 per worker. Port operators said that the payments were too much for their comfort.

“It’s been a perfect storm for the shipping industry,” said Bill Johnson, director of PortMiami. “They have all cut staff and had to look at their supply lines. They can’t sustain this.”

“A great deal of the freight that arrives in the U.S. to serve the East Coast is today off-loaded in West Coast ports,” said Allison Skipper of the South Carolina Ports Authority. “There are new opportunities for the same freight to travel directly, by all-water, to a location much closer to its final destination.”

Richard Wainio, the former director of the Tampa Port Authority, said, “The shipping lines can argue there’s going to be growth that we can all benefit from, but East Coast ports need to be competitive with the West Coast and railroads. If they are not competitive the ports will lose potential growth and that will hurt the interests of the longshoremen, too.”

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