BALTIMORE -- Maryland Port Administrator David Wagner has suggested the creation of a committee of labor and management leaders to consider alternative ways of keeping a key benefits program for longshoremen adequately funded.
Wagner's suggestion, a response to increased labor costs at the port, was contained in his annual State of the Port address.
He said that the Baltimore port is at a crossroads and that the next six to 12 months will determine if it will remain a world-class operation.
Wagner said one of the main problems to be solved is funding of "guaranteed annual income" benefits to eligible members of the International Longshoremen's Association. Slumping business has left longshoremen with less work, creating a drain on GAI funds because more longshoremen need payments and because the program is paid for by a fee charged for every hour a longshoreman works.
Facing a multimillion-dollar shortfall in the fund, the Steamship Trade Association of Baltimore, representing waterfront management, decided recently to increase the GAI assessment against stevedoring firms effective Oct. 1. It is expected that some of the increase will be passed along to shipping lines, possibly resulting in fewer ships to handle.
Lower GAI assessments were one of the factors that made Baltimore cheaper than the Port of New York and New Jersey, Wagner said. Increasing those costs erodes Baltimore's competitive advantage.
Wagner said after the speech that the committee could examine alternatives to future fee increases, such as additional early retirement or retraining programs for longshoremen. It could also be used to settle disagreements between the STA and ILA over how much money is needed.
Wagner said he plans to discuss it with Gov. William Donald Schaefer, who has made wide use of such committees in his public career, when the two conduct an overseas trade mission later this month.
Wagner also said that despite several positive developments in the last year, "I've sensed that in the past few months we've begun to lose the positive momentum."
The GAI assessment increase and the collapse of the ILA-MPA New Business Team represent the latest of many "strong warning signs" about trouble in the port, he said.
"I'm not raising these issues to present a bleak long-term future for the port. Quite to the contrary. They are warning signs that left unheeded could lead us in that direction," he said. "If we fail to react ... this port will look a lot like Boston within the next five years. We won't be served by most major lines except by barge.