Cargo service provider Alliance Ground International has reached agreement with a major union on terms for approaching workers about becoming their bargaining representative, averting a potential disruption of cargo shipments at Chicago O’Hare International Airport.

The airport authority notified about 20 cargo airlines Friday that the ground handling agent was no longer in jeopardy of losing its license to operate and that business would continue as normal, according to a copy of the email reviewed by FreightWaves. Swissport, another large cargo agent, has yet to sign a labor peace agreement mandated by the city and could be barred from operating within two weeks.

“The Chicago Department of Aviation (CDA) is pleased to notify you that AGI [which also owns TAS and Maestro] has executed the required labor peace agreement and is now in compliance with its license requirements,” wrote Amber Ritter, the chief commercial officer and managing deputy commissioner. “AGI/TAS/Maestro is no longer at risk for license revocation on Jan. 20. CDA continues to urge Swissport Cargo to act swiftly to come into compliance to avoid license revocation on that date.” 

AGI reached agreement with the Service Employees International Union late Thursday night, said a company representative. No terms of the deal have been disclosed so far.

A source familiar with the negotiations previously told FreightWaves the union insisted the employer recognize the union if more than 50% of its employees signed authorization cards, a process known as “card check,” rather than going through a more difficult campaign and secret-ballot election. 

The Airforwarders Association, which represents logistics companies that arrange air shipments for businesses, expressed relief about the resolution in a message to members. The group said Thursday it was concerned the impasse over making it easier for unions to organize could adversely impact cargo operations at the second-largest U.S. cargo airport, not including the FedEx and UPS homeports.

AGI and Swissport process two-thirds of the cargo moving through O’Hare airport.

“Swissport is actively working with the leadership of the City of Chicago, the leadership at O’Hare Airport, and union representatives on an updated Labor Peace Agreement. We are confident in reaching an agreement that will allow Swissport to continue to serve our customers at O’Hare without disruption,” the company said in a statement.

Airlines only became aware of the potential crisis when the CDA informed AGI and Swissport customers less than a month ago. Several indicated in previous reporting that they would have to suspend flights to Chicago and seek alternative airports if their vendors were closed down because there wasn’t enough time for replacements to be recruited and qualified. They also expressed concern that contractors not affected by the impasse could engage in price gouging because of the heavy demand for their services. 

Ground handling companies work under contract to airlines providing a range of outsourced services such as baggage handling, cabin cleaning, refueling, towing and pushback. For cargo operations, airport service companies occupy airport terminals where freighter aircraft park close by. The cargo agents are responsible for receiving and discharging truck deliveries, consolidating and sorting shipments from passenger and cargo jets, loading and unloading aircraft, and providing ramp services.

New licenses issued last summer required airport service providers to implement a “labor peace agreement” within 60 days of being approached by a union. Local governments are increasingly requiring private employers to agree to such conditions for the right to do business on public property or bid contracts. The government can’t mandate specific terms of an agreement, but simply negotiating a deal provides unions with significant leverage in seeking concessions from employers, according to labor experts.

Federal law preempts local and state regulation of labor relations in most cases, but localities have taken advantage of a legal loophole that gives them the right to impose conditions if they have a “proprietary” interest in a project, similar to any other market actor.

Click here for more FreightWaves/American Shipper stories by Eric Kulisch.

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