H I S T O R Y

1 9 8 6 - - 2 0 0 2

1989 Board ol DJreClom, Counsel, Staff 8rid Members. 81anding/lell to dghL), CaplaTn LIn, Captain Larsen,Petel C. Lam~'os. James M(~lia, Edward Kelly. Caplain Feral, Donald S~hmid I, Je~ph Barbela, Caplai~ K~O,Da,Ad J. To~an, Chairmao, K[rR Kdege~ C. Pele~ Lambos, Eo~,,a rd Morgan, hmolhy Collinsr Peter Vi~e rs.Seated (left to righlg Olal ,.,on Maydell, J. Einest Celosse~ Bernard DeLur~ Rudolph Ramm

./_]astHlast ime a coase, vide strike affected the major contanierp~r ts in the Allan0c and Gulf port range wasf:eaoago, in 1977. That action had been preceded b},, a series of long slrikes in 1952, 1954, 1957, 1959,

~ff21,, 1164, 1968, 1971 and 1977.The past quarte~centatry of labor peace is not an accident. It rests on a foundation made up, in largeme~ure, of the hard work, creativity and innovation tI~at ocean carrier members of the Carders Container

Council, Inc. (CCC) and its predece~or carrier group, the Job Security Program Agenw, Inc. (JSP), broughtto the collective bargaining process with the ILA.

Carriers have been involved in ~,laster Contract bargaining since its inception in 1957. At tha~ time, unpaidsenior carrier executives headed Ibe New York Shipping hsscciaBon (RYSA) and its Board of Directors. Forexample, various carriers served either as ch/ef executive of i~'SA (president) or as a principal negogalo~;

The Carriers Container Council, Inc. (CCC) was created as an unofficial, itfformal body (a part of NYSA)

after the creation of the Rules on Containers. These roles, created in 1969--and known as the "50 i~lileRule" prohibited carders from delivering LCL containers Eo any entity otber fi~an the "beneficial mvnet"

The Council (it was then knmwl as the Cont.'liner Carriers Council) w.~ first mentioned in the 1972 ~,tasterContract ConiainerizaBon Agreement The Council acted as a bedy to make known the various positionsand interests of container carrieea in collective bargaining.

t n t 9 7 7 , ; ~ h , L :l~ahl~"

months o f ' .~0 , ~ : , I h y

the ina i ! i [ i t~ o~ try.: ,Hher

j o b ~ c u l , ! ! ! , ; ~ , ~ l a , l l I ~ i ~ g d c m l r 0 i l ~ H s : ! L ~ ! I ~ i l , . ~ i ~ ! J C C C

a[ Id~A r~ j~ .~ l t ! , ! j~ .~ !~r /~ , j i J~ l l l~ ;~ : r, ¸ ¸ h r ld~L~! l~ !0 !~ ~ \ t ,d~ l la [ td

~[ prolediolt ~/[it~, ii i~;~¸ i Ir, )1~ i~l~i h,~:!; ~,~:'0 I~ i:~ 0\:,~

The carde~ and 01e 0 ~ agr~d Eo I!1~ 1,0~ ~ t~riiy Ih~gram. co~ring 36 ~ris

from Maine to 'l~xas, which became ~troa/ttsdy effecttse on December l, 1977.This agreement ended a 57-day selective strike

From 1977 fonvard, all ,',Iasler Contrac[ collective agreements have beennegotiated ivith the filll portidpaUon of the carders through CCC.

From the 1980 negotiations om,,,'aM, CCC, with its principal spokesman, achaimlan representative of a steamship carrier, formed an important dement in

the Master Contmc~ negotiations The ILA recognized the chairman as chiefspokesman for the carriers. His presence, together leith a commgtee of carriers,w~ important because ~eithout the Council, no binding agneement could bem,'tde by the port management ,'kssocJ~tJollS as to oa~[ is,sue8 *uch ~ wages

and benefits.

CCC Brought stagiRly to the Industry

Howeveg by far the ritost significant conldbution made by CCC is that ~fter the

strike of I977, the presence of the Council and its growing influence throughoutthe Atlantic and Gulf Coasts eliminated all strikes resu[0ng from MastetContract bargaining.

David J, TolanCbaltaanCarriers Container Council, Inc.

1000 - 2002

'B.E. De Lury

1990CBF Program Begins: CCC Named 1992

a~ Agent Six CFB Stations Approved1988 Baltimore Office Opens Indust~y Resource Group Formed 19

1986 CCC Moves Headquarters Joint Management West Gulf, South Atlantic and 17 CFS StatioJob Security Program Oiscontinued to Jersey CBy ILA Industry, Preservation New Orleans Subscdbe to 8,000 I[A Met

ILA Becognizes BCC Savannah Office Opens Group Formed Master Contract through CF

t I I lt I ] I1987 1989 1991 1993

CCC Incorporated CFS Program Begins CFS Program Expanded 3Ogg IIA Members TrainedJSP Agency Absorbed by CCC CBC Named as Agent to Cover Training I~reugh CFS Program

BAI Eliminated in South APanec

S#cm/ao I

CardeesContatnerOouRcd, ]nc1986 2001

This accomplishment is significant when G is considered that prior to themaior role undertaken by the carriers in 1980, there had been strikes in

195% 1954, 1957, 1959, 1962, 1964, 1968, 1971 and I97L Seven Ta0-Hadley injnnctions had to be issued by the President of the United States to

stop IIA strikes, and most of the sldkes mentioned had continued for morethan 50 days after file Taft-Hartley injunction expired

Thus, the maior accomplishment of COO has been to biing stability tothe longshore industry for the first time in ses~ral decades. Beginningin 1980, there was a sing]e oarrter bodyand automated issues on a Maine-lo 'P~xas basis. Without such an~,organization, labor peace was, and would continue ~o b,

to achieve.

A new ptfilomphical approach was brought to co0ectG,e bargaining by thepresence of COO in the negotiations, In 1987 and 1988 tbe NA, for tile first

thne, entered into a Statement of Purpose whirl set forth the aims soughtto be achieved by each side in the following Master Contract bargaining.WithotB the ILA's recogtiiBon and the commRment of CCC, a joint approachwould not hm,e been achieved.

The COO PhUc*ophy

Tbe carriers set forth Ibeir desire for tile creation of a profe, sional,

productive work force consisting of a balance between jobopportunities and the available work force,

Staffs on piers and longshore gangs were to be reduced;Container Freight Stations (CFS) wBbnnt many tredBionaIIlk manning and ~mrk rnles were to be cleated, and the

employers' fight to manage and to introduce laborsavingand i nnovaSve methods and technology was 1o be recognized.

ilestones Along the Way

1996pointing Historic Five-YearTrained Master Contract

Jgram CovBring All Ports

2000 20021998 Master Contract Extended CaB Service Corp. Created

Pharmacy Benefits Plan Implemented Through 2004 CCC Regional Offices BecomeHouston Of Bee Opens MILA Fully Implemented USMX OfficesCAP Program Refunds CAP Program R~funtis CCC Service Corp. Begins Operations

$16.8 Million to Carriers $24.9 Million to Carriers on Ju[y 1,2002

I J20011995 1997 1999

lust~/Commences Negotiations thr OSMX Created MILA Health Cam Plan199B Master Contract CAR Program Refunds Coveraga Agreed To

Coast wide Health Care $13A Md[ion to Carriers CAP Program RefundsProgram Proposed $24.2 Mglion to Carriers

USMX Assumes readershipCAP Program Refungs$2g Million td Carriers

As a re*tilt of this approach, gang sizes were reduced,Donald J. Schmidt workfo~ces were reduced by attrition, and theF~vectt t i~ Director

Cm3rier~ Container Council, lnc. introduction of new, more productive methodswas accomplished without labor sMth. In

Prank CangemiPl~tdent

~Bgg-1996

Daniel G. StewartAdmioB l ra to r

JSP Aget~ [r~c.1977-1984

addition, tile col]ecfve bargaining agreement Carders Container Councg J l l ~ , ~

provided for the training of those who had been impacted 1985 - 1986

by labor-*aving technological innovations.

By 1989, the industry, led by CCC and the ILA, had come together for the propose of rethinking nature offirture collective bargaining agreements. Tile parlies formed a 14-man joint committee of labor and

management, the Industry Preservation Group, for the purpose of stlldying and resolving questions of jobprotection, technological innovation and productivity.

in this Industry PteservaBon Group, the chairman of CCC and one other carrier representaB~ were joined by fivepart a~ia6ons. The cartiet~ recngnized their responsibility to the work force by providing nece~ary funds for

retraining, supporting Container Freight Stations (CFS), and pro'tiding needed support to weB, re, vacation andholiday [~.mds threatened by economic problems.

On tire otber hand,the rights of the ILA and its members were also recognized. These rights included a substantiaIwage, outstanding fringe benefits, favorable pension plans, training for afi~cled employees and many other

benel6s eddch made the longshore labor force the recipient of an outstanding fringe benefit package.

CCC and its predece~or carrier grortps, together wlfh the m~ny participating part groups, gave a strong impetusto the development of productivity tiiiprovemenls in the longshore industry.

Improved Methods of Master Contract Bargaining

Not~dthstanding the progress made by CCC and its partners be~'een 1986 a~d 1991, theindustry faced tremendous hurdles.

In the year 1992, there was no coast-wide Master Contract, the Atlantic, South Atlantic andGulf regions bargained strictly on the basis of their own regional concerns, ILA fringe

C. Peter Lambos6bume/

1999-2992

IJames L Newsome, Jr. I

South Atl,~Uc a.d 6ul[~orm'~:l1988 1992 I

I~neflt costs were spiralling out of control and the industry was losing market share to non-ILA

-e ,l[~iL compegtion and the West Coast.

Now, 10 short ),ears later, them is one Master Contract which covers every Atlantic and Gulf ~rgthere is a single otganizalion, USMX, representing the carriers, stevedores and employer 'port

associations, the 1996-200i Master Contract deli~.ered over $280 mglion of savings to the ILA 'emplo)~rs and there is a single coastwide health program, MILA, which will protect the indust~ from

unchecked health insurance costs. How this happened is [argeiy ,as a tesng of the action andinitiatives taken by the CCC, under the leadership of Chairman David J. Tolan and James A- copo,

. ~ .

the president of New York Shipping As.~ciatio n, It~c.

In 1590, the Management and the ILA negotiated a contract that covered many of the portson Ihe Atlantic and South Atlantic coasts. Howeveg the ports in the North Atlantic and gle Gulf were not partiesto this agreementi The members of CCG were concerned about the fact that they had to operate under differentconditions depending upon which port their sldps called. I

Peter¢. gambos

this th° ports fted ad p ed the '4 ,8=:"_'1o=,contracl wilh the ILA to subscribe to the 1990 contract. They accomplished this by insisting that any pert (both 1management and the local ILA) which continued to bargain wifl~ the careers on any partictgar issue, had to adopt the 1990contract as part of any agreement with the carriers and the CCC. By 1994, using this approach, CCG was able to convince theSouth Atlantic Engrlopers Negotiating Committee, the New Orleans Steamship Association, the West Gulf Maritime ,Zssociationand the ILA in all three regions or ports to adopt tim 1990 contract as part of the negotiation and settlement ofregional issues.

In 1994, CCC, together with representatives from the major porL associations and the major stevedore~such ~ Maber Terminals, Stevedoring Services of America, CoopetsT. Smith,

Ceres, ITO and Universal started to discuss tile possibility of . . ,negotiating the 1996 contract wgh the ILA wlfh a coalition of lain lfl. Spehna~carriers, stevedores, and port associations that were parties to the C~C~w#et,

I990 contract Finatig after nearly a year of discussions and meetings, the 199g~ 2~

'~[I]l~ stevedores and port m~sociations agreed to join with CCC to negotiate the

V /19~)6 contract with the ILA, a series of negotiations which ~'ould include

every IlA port from Boston to Texas.

The negotiation of the 1956 contract with the ILA resulted in a major breakthrough. Unlikeprior negotiations which had ended ~dth various parties abandoning tile negotiations, the yearlong

negotiations which starled in November of 1995 resulled in a frye-pear contract which for tile ftrst timebound every port on both the E~t and Gulf coasts of the United States. The Master Contract itself was anunprecedented success. It reduced die gang size, it reduced the container royally, it eslabltsfted the CAPprogram (which has retnrned ~ I00 million to the carriers), it created MILA, and overall, it delivered over$280 milgon in s,'tvings to the industry over the fg~pear tern] of the agreement. Furthermore, CCC

developed a computer model for the negotiations which enabled Management to prepare up to the minute financial analysisfor the evolving bargaining pmposalg and the ongoing administration of the Master Contract.

Seizing on the successes which the coalition had achieved dLning the negotiation of the 1996 M~terContract, the leadership of CCC took steps to fomlalize the coalition btio an organization that wouldrepresent the hBerests of the carriers, stevedores and [~ort associations on an ongoing basis with the ILL

In 1997, the United States blariilme Alliance, Ltd. vms incorporated to achieve this goal. Since its creationin 1997, USMX has become the paramount management representative with respect to theMaster Contract.

While USMX was becoming the collective bargaining represeniain'e for all segments of the industry,including the carrier membership of CCC, CCC continued to work for beth the carrier8 and the entireindustsy. Beginning in 1997, CCC led the successful defense in a massive anti trust lawsnit brought againstbeth Management and the [LA by Bermuda Container Lines. Had Bermuda Container Lines won, theMaster Contract would have collapsed because carriers would have been free to pick and choose wBem theywould be bound by the Master Contract.

In 2000, CCC led the effort to convince the lb'~ that the 1996 lH~ter Contract should be extended for threeyears until Seplember 30, 2004, efforts ilmt resulted in a three-year extension which is projected to costManagement only seven percent over tile illree-year life of the exlension. Ftlrthermore, CCC has corninuedto edmintster the Corder-ILA Container Freight Station program, a program which has laid out over $127million in benefits since 1989. In addition, because of its unique knowledge of how asseSSments arecharged and collected under the temls of the blaster Contract, CCC has continued to represent the cardersin tile CAP program. Finally, CCC insures that MILA receives the man hour and tonnage contributions towhich MILA is ~ntided.

Into the Future

With the emergence of USMX, CCC is now embarking on a new role. CCC will no longer represent thecarriers in collective bargaining as it has since its inception in 1987. The three of Bees which CCC operatedin Baltimore, Savannah ,'uld Houston have become USMX ofBee~, gg:ect b'e July I, 2002, CCC will sunset itsoperations. However, a ile~v CCC has emerged. The CCC Service Corporation has been incorporated as afor-profti corporation under Delaware law+ It will continue to serve the CFS program, MILA, and it will

administer the CAP program+ It rdll also be available for the indmlry Io use x'cith respect In rek~trch andvital information which USi~IX or its members may require. Whether it's the old CCC or the new CCC, theteml "CCC" will still be synonymous with exemplary service to the maritime industry on the Atlantic andGrill co~ts of the United Stales