The Genesis of USMX: New York Shipping Association and Carriers Container Council
Ocean carriers have been involved in Master Contract bargaining since its inception in 1957. At that time, unpaid senior carrier executives headed the New York Shipping Association (NYSA) and its Board of Directors. For example, various carriers had served either as president of NYSA or as a principal negotiator.
The Carriers Container Council, Inc. (CCC) was created as an unofficial, informal body (a part of NYSA) after the creation of the Rules on Containers. These rules, created in 1969—and known as the “50 Mile Rule”—prohibited carriers from delivering LCL containers to any entity other than the “beneficial owner.”
The CCC (the Council) was first mentioned in the 1972 Master Contract Containerization Agreement. The Council acted as a body to make known the various positions and interests of container carriers in collective bargaining.
In September of 1977, after many months of a strike caused by the inability of the other established management groups to agree on a job security program being demanded by the ILA, the members of CCC assembled at a special meeting . These carrier representatives and NYSA addressed the issue of an “insurance” fund to meet the ILA’s demand for protection of the fringe benefit funds from Maine to Texas.
The carriers and the ILA agreed to the Job Security Program, covering 36 ports from Maine to Texas, which became retroactively effective on December 1, 1977. This agreement ended a 57-day selective strike. From 1977 forward, all Master Contract collective agreements were negotiated with the full participation of the carriers through CCC.
From the 1980 negotiations onward, CCC with its principal spokesman, a chairman representative of a steamship carrier, formed an important element in the Master Contract negotiations. The ILA recognized the chairman as chief spokesman for the carriers. His presence, together with a committee of carriers, was important, because without the Council, no binding agreement could be made by the port management associations as to cost issues such as wages and benefits.
CCC Brought Stability to the Industry
The most significant contribution made by CCC came after the strike of 1977, when the presence of the Council and its growing influence throughout the Atlantic and Gulf Coasts eliminated all strikes resulting from Master Contract bargaining. This accomplishment was significant considering that prior to the major role undertaken by the carriers in 1980, there had been strikes in 1952, 1954, 1957, 1959, 1962, 1964, 1968, 1971 and 1977. Seven Taft-hartley injunctions had been issued by the President of the United States to stop ILA strikes, and most of the strikes mentioned had continued for more than 50 days after the Taft-Hartley injunction expired.
Thus, the major accomplishment of CCC was to bring stability to the longshore industry after several decades of labor strife. In 1980, there was a single carrier body that could speak to container and automated issues on a Maine-to-Texas basis. Without such an organization, labor peace was, and would continue to be, impossible to achieve.
A new philosophical approach to collective bargaining was brought by the presence of CCC in the negotiations. In 1987 amd 1988 the ILA, for the first time, entered into a Statement of Purpose that set forth the aims sought to be achieved by each side in the ensuing Master Contract bargaining. Without the ILA’s recognition and the commitment of CCC, a joint approach would not have been achieved.
The carriers set for their desire for the creation of a professional, productive workforce consisting of a balance between job opportunities and the available work force.
Staffs on piers and longshore gangs were to be reduced; Container Freight Stations (CFS) without many traditional ILA manning and work rules were to be created, and the employers’ right to manage and to introduce labor-saving and innovative methods and technology was to be recognized. As a result of this approach, gang sizes were reduced, workforces were reduced by attrition, and the introduction of new, more productive methods were accomplished without labor strife. In addition, the collective bargaining agreement provided for the training of those who had been impacted by labor-saving technological innovations.
By 1989, the industry, led by CCC and the ILA, had come together for the purpose of rethinking the nature of future collective bargaining agreements. The parties formed a 14-man joint committee of labor and amanagement, the Industry Preservation Group, for the purpose of studying and resolving questions of job protection, technological innovation and productivity.
In this Industry Preservation Group, the chariman of CCC and one other carrier representative were joined by five port associations. The carriers recognized their responsibility to the workforce by providing necessary funds for retraining, supporting CFS, and providing needed support to welfare, vacation and holiday funds threatened by economic problems.
On the other hand, the rights of the ILA and its members were also recognized. These rights included a substantial wage, outstanding fringe benefits, favorable pension plans, training for affected employees, and many other benefits that made the longshore labor force the recipient of an outstanding fringe benefit package.
CCC and its predecessor carrier groups, together with the many participating port groups, gave a strong impetus to the development of productivity improvements in the longshore industry.
Improved Methods of Master Contract Bargaining
Notwithstanding the progress made by CCC and its partners beween 1986 and 1991, the industry faced tremendous hurdles.
In the year 1992, there was no coastwide Master Contract; the Atlantic, South Atlantic and Gulf regions bargaining strictly on the basis of their own regional concerns; ILA fringe benefit costs were spiralling out of control, and the industry was losing market share to non-ILA competition and the West Coast.
Just 10 years later, in 2002, the following accomplishments could be noted: one Master Contract, which covers every Atlantic and Gulf port is in place; there is a single organization, USMX, representing the carriers, stevedores and employer port associations; the 1996-2001 Master Contract delivered over $280 million of savings to the ILA empoyers, and there is a single coastwide health program, MILA, which protects the industry from unchecked health insurance costs. These accomplishments were due, in large part, to the action and initiatives taken by then CCC Chairman David J. Tolan and then NYSA President James A. Capo .
In 1990, Management and the ILA negotitated a contract that covered many of the ports on the Atlantic and South Atlantic coasts. However, the ports in the North Atlantic and the Gulf were not parties to this agreement. The members of CCC were concerned about the fact that they had to operate under different conditions, depending upon which port their ships called.
To address this problem, starting in 1992, CCC started to work toward getting the ports that had not adopted the 1990 contract with the ILA to subscribe to the 1990 contract. They accomplished this by insisting that any port (both management and the local ILA) that continued to bargain with the carriers on any particular issue, had to adopt the 1990 contract as part of any agreement with the carriers and CCC. By 1994, using this approach, CCC was able to convince the South Atlantic Employers Negotiating Committee, the New Orleans Steamship Association, the West Gulf Maritime Association, and the ILA in all three regions or ports to adopt the 1990 contract as part of the negotiation and settlement of regional issues.
Approaching the 1996 Master Contract Negotiations
In 1994, CCC, together with representatives from the major port associations and the major stevedores such as Maher Terminals, Stevedoring Services of America, Cooper/T. Smith, Ceres, ITO and Universal, started to started to discuss the possibility of negotiating the 1996 contract with the ILA with a coalition of carriers, stevedores, and port associations that were parties to the 1990 contract. Finally, after nearly a year of discussions and meetings, the stevedores and port associations agreed to join with CCC to negotiate the 1996 contract with the ILA, a series of negotiations that would include every ILA port from Boston to Texas.
The negotiations of the 1996 contract resulted in a major breakthrough. Unlike prior negotiations that had ended with various parties abandoning the negotiations, the year-long bargain started in November of 1995 and resulted in a five-year contract that, for the first time, bound every port on both the East and Gulf coasts of the United States. The Master Contract itself was an unprecedented success. It reduced gang size, reduced container royalty, established the CAP program, created MILA, and delivered $280 million in overall savings to the industry over the life of the 5-year agreement. In addition, CCC developed a computer model for the negotiations, which enabled Management to prepare up-to-the-minute financial analyses for the evolving bargaining proposals and to the ongoing administration of the Master Contract.
The Birth of USMX
Seizing upon the successes that the coalition had achieved during the negotiation of the 1996 Master Contract, the leadership of CCC took steps to formalize the coalition into an organization that would represent the interests of the carriers, stevedores and port associations on an ongoing basis with the ILA. In 1997, the United States Maritime Alliance, Ltd. was incorporated to achieve this goal. Since its creation in 1997, USMX has become the paramount management representative with respect to the Master Contract.
While USMX was becoming the collective bargaining representative for all segments of the industry, including the carrier members of CCC, CCC continued to work for both the carriers and the entire industry. Beginning in 1997, CCC led the successful defense in a massive anti-trust lawsuit brought against both Management and the ILA by Bermuda Container Lines (BCL). Had BCL won, the Master Contract would have collapsed, because carriers would have been free to pick and choose where they would be bound by the Master Contract.
In 2000, CCC led the effort to convince the ILA that the 1996 Master Contract should be extended for three years until September 2004. The results were a three-year extension that ended up costing Management only seven percent over the life of the extension. CCC continued to administer the Carrier-ILA Container Freight Station program, which had been in effect since 1989. In addition, because of CCC’s unique knowledge of how assessments were charged and collected under the terms of the Master Contract, the organization continued to represent the carriers in the CAP program, and continued to receive and collect manhour and tonnage contributions to which MILA was entitled.
Into the Future
With the emergence of USMX, CCC took on a new role. It would no longer be representative of the carriers in collective bargaining, as it did since its inception in 1987. Its Savannah office officially became a USMX office handling South Atlantic and West Gulf issues, and effective July 1, 2002, Carriers Container Council officially sunset its operations. As a result, the CCC Service Corporation was born, and as a division of USMX, is responsible for assisting with USMX's implementation and ongoing administration of the latest Master Contract, as well as for providing essential services on its behalf:
- Administration of reporting/payment of USMX member assessments
- Payroll/general accounting and financial reporting for the companies and funds (USMX, CCCSC, CRCCF, CFS, CR5 and CRF)
- CCCSC, in conjunction with CRCCF, implemented the Central Collection System
- Maintenance of receivables
- Information Technology services