1 - American Memory

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under tbe injunction obtained by tbe governor. If this legislation had been law
prior to July 1, 1971, Matson would have accrued a total retroactive payment of
approximately $939,000 for the 1971-1972 longshore strilce. At today's wage rates,
this accrual would aggregate approximately $1,200,000. This accrual would repre-
sent an out of poelcet cost to Matson not recoverable from its customers since
under regulatory law it cannot file rate increases for the purpose of recovering
past experienced costs.
Unlilie the other members of PMA, all of Matson's commercial rates are sub-
ject to economic regulation under the Shipping Acts by the Federal Maritime
Commission; such regulation does not apply to those rates applicable to services
provided in the foreign commerce. This means then that Matson, if it wishes to
recover from its customers those increases in labor costs resulting from any
agreement resolving a dispute, must file increased freight rates with the Ck>m-
mission and run the rislc that the effective date of such increased rates may be
suspended for a i)eriod of four months. Allowing time for preparation of the new
rate schedules and the statutory requirement that such schedules be filed on 30
days notice means that if the effective date of the increase is suspended for the
full statutory period that Matson would be immediately denied the additional
revenue represented by the rate increase for a period of six months. Those PMA
members engaged in the foreign commerce merely file increased rates on thirty
days notice with the scheduled effectiveness of the increases assured.
Further, in negotiations with the offshore unions four of the five PMA vessel
operating members involved in such negotiations receive operating differential
subsidy pursuant to the Merchant Marine Act, 1936, in respect to their operations
in the foreign commerce of the United States. As a consequence, some portion of
any increase in wages and related benefits agreed to in resolving a dispute with
the offshore unions would be passed to the government through the subsidy
program. As an operator in the domestic offshore trades, Matson receives no
subsidy of any Iiind. Therefore, Matson has every compelling incentive to
vlrgorously participate In the negotiations in a normal and usual manner. It is
clear that because of these incentives and because of its minority position within
PMA that a resumption of operations by Matson while other operations remain
strike-bound will not add anything to the economic power of the management
side of a dispute nor contribute to any divisiveness among the employer group
which if existent would possibly contribute to a prolongation of the dispute.
In connection with any allegation that this legislation will promote divisiveness
among the employer group it should be pointed out that a longshore or offshore
maridme strike on the Pacific Coast impacts more immediately on Matson's
Hawaii service than it does on the vessel operations of those members of PMA
who are engaged in the foreign commerce. For example, if a strike commenced on
August 1, all of Matson's ves.sels would be strike-bound at Pacific Coast ports
by August 10 and the majority of them by as early as August 6. On the other
hand all of those vessels operated by other U.S. flag carrier members of PMA
would not be strikebound until September 20—61 days after the strike
commenced.
All ves-sels would become strikebound as they arrive inbound at a Pacific
Coast port; the difference In time before Matson's vessels and other U.S. flag
vessels would become idled at such ports is due to the greater distances traveled
by those other carriers in the foreign commerce. For example one such carrier
operating vessels between the Far East and California would require 45 days to
complete a round trip voyage between those two areas. Some Matson vessels,
however, can complete a voyage between California and Hawaii in as few as 10
days. As a consequence those Matson vessels that have commenced a voyage
before the .strike begins will be strikebound at their return Pacific Coast port
in a relatively short time.
In the event of a 60 day strike. Matson's vessels would be idled for an average
of W.ft days while the total fleet of other U.S. flag carrier members would be
idled for only an average of 1.5.6 days and as a consequence the economic impact
of a strike on Matson is significantly ereater. In the case of an offshore maritime
strike it means that those union personnel manning Matson vessels are "on the
beach" without income at a much earlier time than those union members serving
on other U.S. flag ves-tels.
During any period of operations resumed pursuant to injunctions issued in
accordance with the legislation, management claims that the work opportunity