By Molly Parker
SCBIZ Daily Staff

CHARLESTON -- Maersk Line will continue to call on the Port of Charleston until at least 2010, when its contract expires. But any commitment beyond that for the port’s largest customer will require concessions by the S.C. State Ports Authority and the International Longshoremen’s Association, a Maersk official said.

Facing declining volume, the world’s largest shipping line has been in negotiations for a year with the SPA to rewrite its contract. 

Of the options the SPA offered Maersk, the company prefers to move to a “common-user” gate at the Wando Welch Terminal, where it would be served by SPA employees rather than ILA labor. This is controversial because it would eliminate several dozen union jobs and further shrink the union’s role at the publicly owned port.

“We understand that the ILA does not wish to see a reduction in their numbers; however, any impact on the ILA from a move to the common yard would be far less than the impact of Maersk Lines’ withdrawal from Charleston,” Maersk spokesman Dana Magliola wrote in an e-mail.

Maersk estimates the loss of union jobs from such a move to be 33, while the ILA says it would be closer to 50.

ILA labor works roughly 3,400 hours weekly servicing both the dedicated and common yard facilities at the Port of Charleston, Magliola said. That number would shrink considerably without Maersk, which accounts for nearly a quarter of the SPA’s container business.

ILA Local 1422 President Ken Riley remained unfazed by Maersk’s public statement. He said, at the end of the day, Maersk is unlikely to move to the common-user gate. He chalked up the company’s statement to political posturing. The SPA, he said, could eliminate the problem if it dropped the “shortfall fees” Maersk’s contract calls for when the company fails to hit certain volume numbers.

“We work with these people every day. We sit across the table on a daily basis,” Riley said. “They do not want to move to the common-user gate. I can tell you that’s not the case.”

Riley said SPA executives have made this a union issue by attempting to force Maersk into the common yard. Ports authority CEO Bernard Groseclose said last week that was not the case. The SPA also offered Maersk the option to remain as a licensed user on the Wando Welch Terminal, if the company agreed to shrink the space it utilizes and return some of the equipment the SPA provided the company per its contract, he said.

Magliola said Maersk officials are in negotiations with the ILA to work out a compromise and that Maersk favors the common-user gate to the “alternative, higher-cost, noncompetitive, dedicated facility.”     

The company does not have a deadline for reaching an agreement, Magliola said, but he noted that reaching accord quickly is essential.

The union issue is particularly sensitive in the Southeast, where ports generally are operated by government entities utilizing a chunk of nonunion labor. Across the country, most ports are operated by private companies using ILA labor.

At the Port of Charleston, most of the labor is unionized, but about 370 SPA employees who don’t belong to a union handle half of the terminal gate operations and all container-lifting equipment.