The International Longshoremen's Association (ILA) plans to demonstrate at the South Carolina state capitol Wednesday to send a message that it will keep fighting to gain jurisdiction over all work at a new Charleston marine terminal, a philosophy the union intends to push for other terminal expansions, including in Savannah.

ILA Local 1422 in Charleston, with support of union members nationwide, is leading the protest against the state's and South Carolina Port Authority's (SCPA) use of non-union state employees at the Hugh K. Leatherman Terminal, which opened in 2021. But the union's message is meant to be heard beyond Leatherman.

"This is not just about Charleston," Kenneth Riley, international vice president of the ILA, told the Journal of Commerce Tuesday. "When we negotiated this [current master contract] language, this was for the entire (east) coast. And that's where the word 'preservation' comes in and that's the point we were trying to argue with the Fourth Circuit (Court)."

That marks the ILA's first public acknowledgement of how it views expansion plans elsewhere, including at the Port of Savannah's Garden City and Ocean terminals and what it believes is its right to also have jurisdiction over all work at those facilities. The Georgia Ports Authority (GPA) is investing $1.15 billion to expand the Ocean Terminal, which handles containers and breakbulk cargo. GPA is also spending $260 million on upgrades to berth 1 at the Garden City Terminal, the largest marine terminal in North America.

Both Charleston and Savannah, as well as Wilmington, NC, use so-called hybrid models for its longshore workforce, with union workers performing certain jobs including maintenance and repair and clerical duties, while state employees operate cranes and perform other on-dock work. At issue is whether giving union members all work at new East Coast terminals or expansions, per a 2013 master contract clause, is creating new jobs or preserving work the ILA is entitled to.

The SC Ports Authority, backed by the state, disputes the ILA's interpretation of the language, arguing the master contract clause was never intended to give the ILA jurisdiction over state employees — a model the port has utilized for decades — but rather was inserted to protect existing ILA work.

"The ILA is erroneously asserting the state is trying to take jobs away from union employees, but those jobs were never theirs to begin with in Charleston," SC Ports President and CEO Barbara Melvin said Wednesday in a statement to the Journal of Commerce. "SC Ports and ILA employees have productively worked alongside one another for decades...Our operating model works, and there is no reason to change it."

Leatherman influence in next contract

South Carolina Gov. Henry McMaster is unlikely to walk away from a current lawsuit against the ILA, given that South Carolina's economic strategy hinges on being a right-to-work state, meaning a state that does not require employees to be part of a union. The U.S. Court of Appeals for the Fourth Circuit Court in Baltimore is hearing the case pitting the SCPA and the U.S. Maritime Alliance (USMX), which represents the ocean carriers, against the ILA. It is not known when a decision could come.

Whatever the ruling, the case could end up before the U.S. Supreme Court, which only accepts about 1% of the cases put before it.

While the legal battle continues, the ILA will use the Leatherman dispute as an opportunity to strengthen language in the next master contract to close loopholes that Riley believes Charleston and Savannah are using to define a terminal expansion versus a new terminal.

"There's a separation in concrete," Riley said. The ILA's existing contract expires at the end of September 2024.

"We'll talk about strengthening the language the next go round to cover (an) extension of an existing facility...to be defined as a new facility that's covered under the master contract, and that those jobs would be 100% ILA," Riley said.

The ILA's decision to boycott Leatherman, the first new marine container terminal to open in the United States in a decade, spurred GPA in 2021 to shelve its plan to build a new container terminal at Hutchison Island.

Riley said he knows Savannah is watching the Charleston dispute "very closely" to see how the outcome might affect its expansion projects.

Officials from the GPA declined to comment.

Author: Teri Errico Griffis

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This article was published by S&P Global Market Intelligence and not by S&P Global Ratings, which is a separately managed division of S&P Global.