2 October 2023 (Lloyd's List) - THE International Longshore and Warehouse Union, which represents labour interests on the US west coast, has filed for Chapter 11 bankruptcy protection as a result of a long-running legal dispute.
The case stems from a dispute over a decade ago when terminal operator International Container Terminal Services Inc took the union to court over slowdowns at the Port of Portland in Oregon.
An initial trial found the union guilty of violating labour law and ICTSI was awarded $93.6m in compensation. This was later reduced to $19m in 2020, but the judge left open the opportunity for ICTSI to appeal the value of the compensation.
ILWU said it had been willing to pay the $19m, but that ICTSI had rejected the reduced damages and a new trial was scheduled.
“Since then, the lawsuit has been ongoing,” ILWU said in a letter to members yesterday. “Unfortunately, the ILWU cannot afford to continue to litigate this case over a decade after its beginning.”
ICTSI was seeking between $48m and $142m in damages in the appeal, it added.
“In the light of this situation, the ILWU had to start consulting with legal and financial advisors and experts to assess the union’s options,” ILWU said.
“We have spent much time and energy trying to figure out how to move forward to ensure the ILWU continues to vigorously advocate for its members and strengthen the labour movement.”
Under the Chapter 11 arrangement, the ILWU will be able to continue operating as it seeks to resolve its financial challenges.
“It will allow us to implement a plan to address and resolve the litigation and anything that might be owed to ICTSI so that the union can move forward and focus on the future,” it said.
Philippines-based ICTSI took control of Port of Portland’s Terminal 6 box and breakbulk facilities in the US in 2011.
It suffered a major blow in 2013, when Hanjin Shipping, which accounted for 80% of its volumes, threatened to pull out of Portland, citing labour unrest.
After a reprieve, it made its final calls to the port in 2015. Hapag-Lloyd also pulled its single service to the port the same year, which ICTSI blamed on ILWU activity.
Container volumes at Portland collapsed to zero by 2017, although the supply chain disruption of the pandemic saw some services return, and by 2022 the port handled 171,000 teu, its best result since 2013.
