Railroad Unions and Companies Reach a Tentative Deal to Avoid a Strike

Excerpted from NYTimes.com, September 15, updated at 9:17AM ET, by Jim Tankersley

President Biden announced the agreement after negotiations brokered by the labor secretary lasted deep into the night.

WASHINGTON — Freight rail companies and unions representing tens of thousands of workers reached a tentative agreement to avoid what would have been an economically damaging strike, after all-night talks brokered by Labor Secretary Martin J. Walsh, President Biden said early Thursday morning.

The agreement now heads to union members for a ratification vote, which is a standard procedure in labor talks. While the vote is tallied, workers have agreed not to strike.

The talks brokered by Mr. Walsh began Wednesday morning and lasted 20 hours. Mr. Biden called in around 9 p.m. Wednesday, a person familiar with the talks said, and he hailed the deal on Thursday in a long statement.

“The tentative agreement reached tonight is an important win for our economy and the American people,” Mr. Biden said. “It is a win for tens of thousands of rail workers who worked tirelessly through the pandemic to ensure that America’s families and communities got deliveries of what have kept us going during these difficult years.”

Potential Rail Strike Update

US rail workers from two of the largest labor unions are preparing to strike this Friday, September 16—which may cause significant delays and disruptions to supply chains. Please note the following changes announced by Norfolk Southern, Union Pacific, BNSF, and CSX Rail Roads.

Norfolk Southern:

• Norfolk Southern will close all gates to Intermodal traffic effective noon local time on Wednesday, September 14, 2022
• In-gates for loaded or empty Intermodal units for rail movement will close at all NS Intermodal terminals.
• Traffic originating at on-dock port facilities and privately owned Intermodal terminals will not be accepted.
• Customers with eastbound interline shipments should contact the originating rail carrier regarding guidelines for the acceptance of traffic at origin.
• Until further notice, out-gates will remain open at all NS Intermodal terminals during normal business hours for customers to pick up units.
• For Norfolk Southern EMP and TMX Customers:
• NS will discontinue filling reservations on equipment effective at 00:01 local time Wednesday, September 14
• Any empty units out-gated after noon local time Sunday, September 11, and until further notice will be charged according to normal per diem schedules
• Customers can return empty EMP and TMX containers to NS terminals as usual until further notice. This process may be modified as terminal conditions require.

Union Pacific Rail Road:

• On Monday, September 12, Union Pacific will begin to secure hazardous and other security-sensitive materials on our property for the safety of our customers, employees, and communities we serve. In addition, we will embargo new shipments of hazardous commodities until those shipments can safely arrive at their destination. We are taking a proactive measure ahead of any potential work stoppages due to an impasse in labor negotiations.

BNSF Rail Road:

• Due to the possibility of an interruption of service when the cooling-off period expires on September 16, we will begin to take steps to manage and secure the shipments of hazardous and security-sensitive materials as early as Monday, September 12.

CSX Rail Road:

• CSX is taking steps to ensure the safety of highly hazardous, toxic by inhalation and poisonous by inhalation (TIH/PIH) materials in the event of a potential rail labor strike. We remain hopeful that agreements will be reached, but to prepare for the possibility of a work stoppage, the company will take action by issuing an embargo on all TIH/PIH shipments and other safety-sensitive freight effective Monday, September 12.

Supply chain breakthrough as German workers and seaports reach agreement

excerpted from porttechnology.org, August 25, 2022

Ports in Germany have struck a landmark collective bargaining agreement with its workers after months of strikes and supply chain unrest.

In the 10th round of collective bargaining with the Central Association of German Seaport Companies (ZDS), the United Services Union (ver.di) achieved a collective bargaining result for around 12,000 employees in German North Sea ports that provides a considerable pay increase.

German ports have continued to suffer from growing congestion from the strikes as the rest of Europe stabilises from the Russia – Ukraine conflict that began earlier this year.

“This is a very good result. Our most important goal was real inflation compensation so that employees were not left alone with the consequences of the galloping price increases. We succeeded in doing that,” said ver.di negotiator Maya Schwiegershausen-Güth.

“This would not have been possible without the extraordinary commitment of our colleagues, who stood up for their goals with warning strikes and demonstrations.”

The ver. di Federal Tariff Commission has already issued a resolution recommendation for the collective bargaining result.

The union will now initiate a discussion process with the members in the companies about the collective bargaining result.

On 5 September, 2022, the ver.di Federal Tariff Commission will then make the final decision on the collective bargaining result.

From 1 July 2022, the wages in full container companies in the corner wage group 6 (including special payment) will increase by 9.4 per cent; in the conventional and general cargo port companies, they increase by 7.9 per cent in the same reference wage group (including special payment).

From June 1 2023, the fees in the will increase by a further 4.4 per cent.

If the price increase rate is higher, an inflation clause comes into effect, which compensates for a price increase rate of up to 5.5 per cent.

In the event of a higher inflation rate, the bargaining parties have agreed on a negotiation obligation, including a special right of termination.

Meanwhile, a major strike is ongoing at the UK’s Port of Felixstowe. The ongoing crisis at the port could last for months as workers threaten strikes until Christmas.

The eight-day strike over pay by over 1,900 workers commenced on 21 August at the East Anglian port, the UK’s largest container gateway which handles over 4 million TEU per year.

UK’s Liverpool Port Could ‘Grind to a Halt’ After Workers Vote to Strike

excerpted from gcaptain.com, August 15, 2022

More than 500 port workers at the Port of Liverpool are set to strike, bringing another one of the UK’s busiest ports to ‘grinding to a halt,’ the Unite trade union announced Monday.

The strike, the timing and duration of which have not yet been determined, comes after workers at Peel Ports-owned Mersey Docks and Harbour Company (MDHC) voted overwhelmingly in favor of the strike in response to an “inadequate” 7% pay raise offer.

“What’s happening at MDHC is another example of why workers in this country have had enough,” said Unite general secretary Sharon Graham. “Once again, a profitable company controlled by a tax-exiled billionaire is refusing to give its workers a cost-of-living pay rise. Our members at MDHC have Unite’s complete backing and support in these strikes for a fair pay rise.”

Maintenance engineers at MDHC could also vote to strike over the same pay offer, with an industrial ballot open starting today until August 24.

Strikes by either group of workers will have a severe impact on both shipping and road transport in Liverpool and the surrounding areas, Unite said.

“The responsibility for Liverpool container docks grinding to a halt will lie firmly with MDHC. Our members are struggling with rising living costs, yet MDHC, which is awash with cash, puts forward a completely inadequate offer. It needs to come back with a deal that meets our members expectations,” said Unite national coordinator Steven Gerrard. The latest comes after more than 1,900 workers at the Port of Felixstowe, the UK’s busiest container port, are set to strike for eight days later this month after failing to reach a pay deal with Felixstowe Dock and Railway Company, a unit of CK Hutchison Holdings. The workers there are also represented by Unite.

Hundreds of workers at Liverpool port vote to strike over pay

excerpted from reuters.com, August 15, 2022

LONDON, Aug 15 (Reuters) – More than 500 dockworkers at the Port of Liverpool, one of Britain’s largest container ports, have voted in favour of strike action over pay and working conditions, the Unite trade union said on Monday.

The industrial action would mean the port would be “grinding to a halt”, the union said, though it didn’t provide details on the start or duration of the strike.

The workers at Mersey Docks and Harbour Company (MDHC), which is part of Peel Ports, the second largest port group in the country, voted 99% in favour of the strike.

“Our members at MDHC have Unite’s complete backing and support in these strikes for a fair pay rise,” Unite general secretary Sharon Graham said.

Rising prices and stagnant real wage growth has seen a wave of strikes across Britain with rail, legal, aviation and refuse workers voting to take industrial action. read more

Peel Ports said it had offered a 7% increase to basic pay on top of a 4.5% pay increase last year and other improvements to shifts, sick pay and pensions.

The Bank of England forecasts inflation in the UK will reach 13% this year and Unite said this would result in a real terms pay cut for workers.

Peel Ports urged the union to keep talking to resolve the dispute.

Did you know:

General insurance policies rarely cover marine cargo claims. You need a marine cargo insurance policy, or you may need to purchase marine cargo insurance on each shipment.

Many carriers will not take responsibility for loss or damage if a warehouse signs off clean on a POD. It is critical, before signing a POD, to note the condition of the cargo. Claims are usually time-barred, unless filed within a few days (standards vary by carrier). So alert your carrier to possible damage immediately. The best way to do this is by signing the delivery receipt notating damage! And be specific, for example,
8 glasses broken, 10 boxes crushed (Make ensure that you have the correct boxes or pallet count).

Every Shipper Needs Cargo Insurance

Global trading involves risk; however, marine cargo insurance coverage minimizes your financial risk. Don’t leave your livelihood up to chance!

Statistics show that one ship sinks each day and you will experience a General Average loss every eight years. If you depend on the carrier to cover losses, their responsibility is very limited (by law), as follows:

Ocean Carriers           $500 per shipping unit (a shipping unit may be defined as one ocean container)

Air Carriers                 $9.07 per pound

Truckers                      $0.50 per pound

The cargo insurance we offer is competitively priced and insures approved merchandise against physical loss or damage from external causes. By purchasing cargo insurance, you can avoid inconvenience and frustration. Contact your BOC Representative for your free quote.

Shippers who rely on suppliers to furnish cargo insurance or who rely on their carriers to take responsibility for losses may be in for a big surprise. Protect your investments by insuring your goods, and provide peace of mind.

According to internationally accepted trade terms, referred to as Incoterms, suppliers selling CIF are responsible for arranging cargo insurance. But just because your supplier has the obligation to arrange insurance under CIF terms, it doesn’t mean that they are ultimately responsible if your product is lost or damaged during transit. The ultimate burden of loss falls upon you, the buyer. This is why many experts recommend importers change their buying terms to control the selection, and thereby, the quality, of insurance coverage. Foreign suppliers and their forwarding agents often add on additional fees to the insurance costs. Those added fees inflate the cost of insurance well beyond market pricing for the same coverage purchased in the United States. Find out how much you’re really paying and then compare quotes received from BOC International.

Additionally, when other parties arrange insurance, you run the risk of having inadequate insurance coverage. Cargo insurance policies can vary widely in levels of coverage, deductibles and special restrictions. Ask for a complete copy of the insurance policy or for a certificate of insurance detailing all the policy terms and conditions.

At least make certain the insurer being used has a favorable financial rating supplied by a respected financial rating service. BOC’s insurance company, underwriters at Lloyd’s of London, has an A.M. Best financial rating of A (Excellent).

Ask your supplier for a list of insurance claims adjusters contracted by the insurance company. Adjuster and surveyor networks approved by Lloyd’s of London and AIMA are among the most credible. BOC has a vested interest in your insurance needs and will directly handle cargo claim documentation requirements to ensure prompt processing and timely settlement.

Are you familiar with GENERAL AVERAGE?

There are a number of notable cases of damage or loss to a vessel, with many resulting in General Average! More recent examples include:

• Ever Forward, March 2022
• Ever Given, April 2021, stuck in the Suez Canal
• Yantian Express, January 2019
• APL Vancouver, January 2019
• ER Kobe, February 2019
• Sincerity Ace – January 2019
• Maersk Honam – March 2018
• Maersk Kensington – March 2018
• Hyundai Auto Banner – May 2018
• MOL Prestige – February 2018
• Caribbean Fantasy – June 2018

Ever Given – The claim process is still ongoing. The average time a case can take is two to seven years.

General Average claims can include a long list of expenses, including damage to the vessel, re-floating efforts, towing and salvors. Egypt alone believes it is owed more than $1 billion in the Ever Given case.

General Average – Background

• Basic principle – “that which has been sacrificed for the benefit of all shall be made good by the contribution of all”
• Applies to maritime claims only.
• Is declared by the captain when there is imminent danger to the vessel, voyage or crew.
• You are contractually obligated, via the Bill of Lading, for unknown and undetermined costs. 

How does General Average work?

• Value of the voyage is determined (vessel value plus value of all cargo on the vessel).
• Participation in costs is determined by the percentage that the value of your cargo bears to the overall value of the voyage.
• The loss amount is determined, and participation percentage is applied, to the loss amount, to determine security deposit.
• Shipper/Consignee or their cargo insurer pay twice – first for the initial contribution, then for a bond covering future adjustments to that estimate.
• Freight may not be released until ALL deposits/payments have been received by all parties involved.

Difficulties of preventing and extinguishing fires on the open sea, which increases the likelihood of a General Average claim, include:

• Ships are larger with more varied cargo.
• Crew are ill equipped to deal with these fires.
• Fire-fighting tugs are often days or weeks away.
• Prevention is difficult, with rising problems with mis-declared cargo.
• IMDG Code is evolving to impose stricter rules on dangerous goods (DG.)

Problems Facing the Industry

• Stricter rules on Dangerous Goods cargo will lead to higher costs and more incentive on the part of shippers to avoid proper declarations
• Ship owners and shipbuilders need to improve fire-fighting capabilities with CO² systems being shown to be inadequate – cost benefit analysis
• National Cargo Bureau in NY found in 2017 that of 1,721 stowage plans inspected, 20% showed errors with DG

General Average will (probably) never go away, so, keep yourself informed:

• Awareness across all business units that losses & delays are part of any supply chain. Mission-critical shipments need more risk analysis to determine transport mode.
• Understanding of what to do when General Average occurs. This is best led by your cargo insurance provider meeting with your ‘team,’ not just the risk manager or CFO.
• Have a contingency plan or at least an understanding of how the event will unfold.

MAKE SURE YOU ARE COVERED! Ask the questions. Do not assume.

Port of Oakland Hit by Truckers Protesting

excerpted from Bloomberg.com, July 20, 2022

Management at the Oakland International Container Terminal decided to close operations today due to the independent trucker protest, and the port’s three other marine terminals are effectively shut down for trucks, port spokesman Robert Bernardo said. Some vessel-labor operations are under way.

RAIL STRIKE AVERTED

U.S. Rail Strike Averted For Now As Biden Steps In Before Sunday’s Deadline

excerpted from law360 and DairHerd.com

As a Sunday deadline loomed in ongoing labor discussions between rail carriers and unions, U.S. President Joe Biden on Friday signed an executive order to create a Presidential Emergency Board (PEB). The move was an essential step in keeping the collective bargaining process on track, as well as keeping the nation’s railways operating.

President Joseph Biden moved Friday to avert a possible strike by more than 100,000 freight rail workers, empaneling a three-member board to help broker a deal between rail unions and carriers.

By creating a Presidential Emergency Board (PEB), the Biden administration heads off any potential disruption that could have occurred upon the expiration at midnight Sunday of a National Mediation Board–mandated cooling off period. The executive order prevents the Brotherhood of Locomotive Engineers and Trainmen from striking and 12 other unions from engaging in secondary picketing, encompassing 155,000 workers.

ILWU/PMA Negotiations, Rail and Dockworker Labor Talk/White House Involvement, German Port Strike, Import Demand Not Dropping?

From Peter Tirschwell, Twitter (@petertirschwell):

“Among sources close to the ILWU/PMA negotiations there are strong differences of opinion. Some believe a deal will come quickly, as early as Aug, with minimal or no disruption, big pay increase & status quo on automation. Others are not nearly ready to jump to that conclusion.”

White House Keeping Distance from Critical Rail and Dockworker Labor Talks For Now

Excerpted from Bloomberg.com, July 13, 2022, by Augusta Saraiva and Ngai Yeung (Bloomberg)

The White House is monitoring labor talks in the logistics industry as unions representing 115,000 rail workers and 22,000 West Coast dockworkers negotiate fresh contracts, but won’t get directly involved in either bargaining process now, its supply-chain envoy said.

“The administration is watching as closely as it can be watched without being a point of interference, which would not be appropriate,” Stephen Lyons said in a virtual briefing Wednesday. “Negotiations are at a place where you’d think the negotiation should be at this particular point.”

Labor impasses are spreading across the US logistics network in the busiest months of the year for shipping, as retailers stock up on back-to-school and year-end holiday goods. Dock- and railroad-worker unions are currently negotiating contracts with employers, with the latter threatening to strike as soon as July 18. 

Talks between the nation’s largest railroads and workers — which started in January 2020 — are in a 30-day cool-off period after a union rejected a binding mediation offer from the National Mediation Board. Next, the Biden administration could appoint a presidential emergency board to resolve the dispute.

Rail Congestion Threatens Nationwide Logjam, LA’s Seroka Says

“We’ve got to get these folks some wage increases; we’ve got to address some of these issues,” Lyons said, adding he doesn’t want to get ahead of President Joe Biden as he makes a decision. “We’ll see what happens on the 17th. But I do think there’s a commitment there.”

Contract Discussions

Separately, the International Longshore and Warehouse Union and the Pacific Maritime Association, which represents about 70 employers, began discussing a new contract in May and are continuing to do so after their previous pact expired July 1. Officials from the ILWU and the PMA, which represents employers, met with Biden when he visited the Port of Los Angeles last month and have recently reaffirmed their commitment to keeping cargo moving despite the lack of a contract.

Any slowdown in operations at the two ports that are responsible for 42% of all containerized trade with Asia could stoke annual inflation that’s running at the fastest pace since 1981, and damp economic growth. Biden, who’s pledged to be the most pro-union president in US history, has directed Cabinet members and logistics-area experts to smooth out pandemic-era port logjams that spurred shortages and delays. Lyons and Labor Secretary Marty Walsh have been in touch with both parties, the port envoy said.

Port of Los Angeles Kicks Off Peak Season with Record June

Meanwhile, about 70,000 truck owner-operators in California — home to the nation’s biggest port complex at Los Angeles and Long Beach — are now in limbo as a local gig-work law starts applying to them. 

California’s Assembly Bill 5 requires workers satisfy a three-part test to be considered independent contractors, or else be seen as employees entitled to job benefits. The state’s truck owner-operators must now comply with AB5 after the Supreme Court on June 30 refused to review a case challenging the legislation that sets out the tests for employment-status classification.

‘So Critical’

On Wednesday, truckers demonstrated against the changes at the port gateways of Los Angeles, Long Beach and Oakland, according to the Harbor Trucking Association.

L.A. operations weren’t affected, and the port had planned for the protest days ahead Executive Director Gene Seroka said. 

“We gave them the breadth and depth and space they needed to voice their opinions but kept this cargo moving; these drivers are very respectful of just that,” Seroka said at the virtual briefing Lyons also attended. “They have a message to put out there and are continuing to do so. I applaud them for coming out here today.”

The Biden administration is still assessing the AB5 issue in California, Lyons said.

“The truckers are so critical to their supply chain — we’ve got to make sure that we’re setting the conditions to take care of them to the best of our ability.”

German Ports: Strike

There is a strike in the German ports for the third time within a few weeks. Against the backdrop of the ongoing collective bargaining negotiations, the service sector union ver.di has once again called on employees in the German seaports to take part in a warning strike. This was announced at short notice for the period from Thursday, July 14, 2022, with the start of the early shift until the end of the night shift on Friday, July 15, 2022 (end of the night shift on the morning of July 16, 2022). As a result of the expected work stoppages, significant disruptions to operations at the German seaports are to be expected. Please take this situation into account in your planning and disposition.

We will continue to monitor the situation.

BOC and Gebrüder Weiss Air & Sea Team Germany