The union for longshoremen along the East Coast and Gulf of Mexico has agreed to extend its contract for 30 days, averting a possible strike that could have had a harsh impact on the U.S. poultry industry.
The extension came after the union and an alliance of port and shipping line operators resolved one of the stickier points in their contract negotiations, involving royalties to the longshoremen . Some important contract issues remain to be resolved, but the head of the Federal Mediation and Conciliation Service, George Cohen, said the agreement on royalties was "a major positive step forward."
"While some significant issues remain in contention, I am cautiously optimistic that they can be resolved in the upcoming 30-day extension period," Cohen told the Associated Press.
The terms of the royalty agreement have not been released.
The master contract between the International Longshoremen's Association and the U.S. Maritime Alliance originally expired in September. The two sides agreed to extend it once before, for 90 days, but it had been set to expire again at 12:01 a.m. Sunday, December 30.
Speaking recently to the USA Poultry and Egg Export Council, Bill Duggan, Maersk vice president and head of refrigerated services in North America, explained in detail the impending strike that would shut down shipping any time after December 29. He said his company had cancelled a few sailings to ship at the end of December because they didn’t want any ships caught in the port.
Larry Lieberman, president of Boston Agrex, Inc., said an earlier West Coast strike hurt the U.S. economy by $1 billion daily, and he estimated its impact on the poultry industry would have been in the tens of thousands daily. The potential strike for the East Coast and Gulf ports would have had “an exponentially more significant impact,” Lieberman said.
“Exports are an integral part of the market mix of the U.S. poultry industry, accounting for approximately 20 percent of production going to export,” Lieberman added. “However, since the mix of products exported is heavily weighted to dark meat cuts, that means the pressure on inventories and prices will be felt primarily in dark meat cuts, legs, drumsticks, thigh meat, etc.”
Major ports that would have been frozen included New York City; Savannah, Ga.; Houston; Hampton Roads, Va.; Boston; the Philadelphia area; Baltimore; Wilmington, N.C.; Charleston, S.C.; Jacksonville, Fla.; Port Everglades, Fla.; Miami; Tampa, Fla.; Mobile, Ala.; and New Orleans.
Longshoremen on the West Coast have a separate collective bargaining agreement.