Dockworkers at US East and Gulf Coast ports represented by the International Longshoremen’s Association are on the verge of a port strike as labor negotiations remain unresolved. The union is in conflict with the United States Maritime Alliance, which represents the employers, over wages, benefits and the introduction of automated machinery in ports.
If no agreement is reached by the end of Monday, October 1, 2024, dockworkers could begin walking off the job as early as Tuesday. This would halt most shipping activities at some of the country’s busiest ports.
Also Read: Mark Zuckerberg News: Meta CEO Joins the $200 Billion Club
The port strike is expected to affect three dozen facilities across 14 port authorities from Maine to Texas. Ports in major locations such as New York/New Jersey, Baltimore, Savannah, Houston and Miami will likely come to a standstill.
The port strike would halt the import and export of a wide array of goods including bananas, European beer and wine, furniture, clothing and auto parts.
The port strike is set to begin at 12:01 a.m. on Tuesday, October 1, if no deal is reached. There are no signs of progress in negotiations as both sides (ILA and the United States Maritime Alliance, USMX) remain far apart on their demands.
The ILA is demanding wage increases asking for a $5-per-hour raise for each of the six years of the new contract. Under the current contract, longshoremen earn a top rate of $39 per hour, which the union aims to increase to $69 by the final year of the proposed contract.
In contrast, West Coast longshoremen will see their wages rise to $60.85 per hour by 2027, as per their existing contract.
With overtime and shift work, longshoremen’s annual earnings can exceed $200,000, but workers claim this requires long, grueling workweeks.
The union opposed to the use of technology that could reduce the number of jobs. The discovery of labor-saving technology at a port in Mobile, Alabama, in June led to the ILA breaking off contract talks.
This machinery has been in place since 2008, but the union claims its increasing use poses a threat to their members’ livelihoods.
Over the last week, nearly $14 billion in trade arrived at the ports with $2.7 billion in goods landing just on Friday.
Approximately 50,000 ILA members are covered by the contract. Ports process an estimated 74,000 containers daily with goods worth upwards of $3.7 billion per day.
The union is pushing for a pay increase with demands reportedly totaling 77% in raises over six years, which would raise the top pay from $39 per hour to $69 per hour.
The union is also focused on resisting automation at ports, which could reduce longshoremen jobs. The USMX has offered wage increases up to 40% over six years, but insists that the union is refusing to negotiate in good faith. Management claims that the ILA has not participated in face-to-face talks since June.
Retailers and logistics companies are in panic mode, rushing to move goods out of the ports before the deadline. Trucking companies and freight rail operators are also working to clear goods from the ports before shutdown.
Importers have been advised to clear containers from terminals to avoid delays and hefty demurrage charges during the port strike.
Some businesses have even sped up deliveries, trying to bring in goods like winter clothing, holiday items and appliances before the disruption.
Essential goods passing through the affected ports include cosmetics, perfume, electrical materials, auto parts and household items.
Retail giants like Walmart, Ace Hardware, Amazon and Walgreens are among those that could be hit hard by the port strike. The apparel and footwear industries would also suffer, as more than half of all US imports in this sector move through the East Coast and Gulf Coast ports.
Also Read: Visa Monopoly News: US Government Sues Visa Over Alleged Debit Card Monopoly
The Biden administration has been monitoring the situation with officials like Transportation Secretary Pete Buttigieg and Acting Labor Secretary Julie Su trying to urge both sides toward a fair resolution.
President Biden has made it clear that he does not plan to invoke the Taft-Hartley Act, which would force union members back to work.
A poll from the US Chamber of Commerce indicated that 58% of registered voters support federal intervention to prevent the port strike, though Biden remains opposed to breaking the strike via government powers.
The Port of Baltimore could be severely impacted. This could lead to shortages of vehicles and automotive parts, slowing production and delaying deliveries to car dealerships.
Factory operations could also be at risk, as key materials used in manufacturing are shipped through these ports. Any disruption in imports of raw materials like sugar, cocoa and other industrial goods would affect US-based manufacturers.
Analysts warn that shipping rates could surge between 20%-50% due to the increased demand for alternative ports.
The ILA has warned that if forced back to work by the Taft-Hartley Act, it will resort to a worker slowdown, deliberately decreasing productivity to exert pressure on management.
The union insists that its workers deserve a more share of the profits that shipping companies earned during the pandemic with industry profits totaling $400 billion between 2020 and 2023.
Economic analyses suggest that a strike could cost hundreds of millions of dollars per day. For example, the Port of New York/New Jersey could face daily economic impacts of $641 million, while Virginia’s ports could see losses of $600 million daily.
Given that nearly 43%-49% of containerized goods entering the US pass through the affected ports, a long-term strike could harm both US-based companies and consumers alike.
President Joe Biden has stated that he is not considering using the federal labor law to force longshoremen back to work at this time.
Under the Taft-Hartley Act, he has the power to suspend a strike for 80 days, but his reluctance to use this authority may be due to the upcoming national elections and a desire to avoid confrontation with labor unions.
In 2022, Biden urged Congress to intervene in a rail strike, but labor experts suggest he may be hesitant to take similar actions in this case.
In the past, the Taft-Hartley Act has been used to force port operators to reopen such as in 2002 during a West Coast port strike under President George W. Bush.
However, employing such a measure would come with political risks especially with unions being a key constituency in the upcoming elections.
Also Read: ACCC Sues Coles and Woolworths Over Illusory Discounts
