Nearly 50,000 members of the International Longshoremen’s Association (ILA) are on strike Tuesday against the nation’s East and Gulf Coast ports, choking off the flow of many of the nation’s imports and exports in what could become America’s most disruptive work stoppage in decades.
The strike, which was confirmed by the Port Authority of New York and New Jersey as well as the Port of Virginia, began at midnight. There appears to be a wide gap between the union’s demands and the offer of the United States Maritime Alliance, which uses the acronym USMX. The maritime alliance represents the major shipping lines, all of which are foreign owned; as well as terminal operators and port authorities.
The strike will stop the flow of a wide variety of goods over the docks of almost all cargo ports from Maine to Texas. This includes everything from bananas to European beer, wine and liquor, along with furniture, clothing, household goods and European autos, as well as parts needed to keep US factories operating and American workers in those plants on the job. It could also stop US exports now flowing through those ports, hurting sales for American companies.
Depending on the length of the strike, it could result in shortages of consumer and industrial goods, which could then lead to price hikes. It could also mark a setback to the economy, which has shown signs of recovery from pandemic-induced supply chain disruptions that resulted in a spike in inflation.
The ports involved include the Port of New York and New Jersey, the nation’s third-largest port by volume of cargo handled. It also includes ports with other specialties.
Port Wilmington in Delaware describes itself as the nation’s leading banana port, bringing in a large share of America’s favorite fruit. According to the American Farm Bureau, 1.2 million metric tons of bananas come in through the struck ports, representing about one quarter of the nation’s bananas.
Other perishable items, such as cherries, also move through the ports, as do a large percentage of imported wine, beer and hard liquor. Raw materials used by US food producers, such as cocoa and sugar, make up a large portion of the affected imports as well.
And many non-perishable goods, such as furniture and appliances, are imported through the affected ports, too. Retailers have been rushing in recent months to get the imported products they expect to sell during the holiday season delivered to them before the October 1 strike deadline.
This is the first strike at these ports since 1977. While the union says there are about 50,000 members covered by the contract, the USMX puts the number of port jobs closer to 25,000, with not enough jobs for all the workers in the union to work every day.
The USMX has complained the union is not negotiating in good faith, saying the two sides haven’t met in person since June. The USMX said Monday it had increased its offer to wage increases of more than 50% over the proposed six-year contract, but a person familiar with negotiations said that offer had been rejected to by union. The ILA is not publicly discussing its demands, but going into the weekend it was reportedly asking for annual pay hikes that would result in raises totaling 77% through the life of the contract, with top pay climbing from $39 an hour to $69.
There are also disputes between the union and management about the use of automation in the ports, which the union said would cost some members their jobs. The USMX said it is offering to keep the same contract language on use of automation in place.
The union says it has continued to talk with the USMX, just not in face-to-face negotiations. Ahead of the strike, it said management knows what it is demanding in order to get a deal done and that any strike would be management’s fault, not the union’s. It said its demands are reasonable given the level of profits in the shipping industry.
“My ILA members are not going to accept these insulting offers that are a joke considering the work my ILA longshore workers perform, and the billion dollar profits the companies make off the backs of their labor,” Harold Daggett, the ILA’s international president and chief negotiator, said in a recent statement.
Shipping rates soared during and immediately after the pandemic, as supply chains snarled and demand surged. Industry profits topped $400 billion from 2020 to 2023, which is believed to be more than the industry had previously made in total since containerization started in 1957, according to analyst John McCown.
Stuck on the sidelines and watching with great concern are businesses that depend on the movement of goods.
More than 200 business groups sent a letter to the White House last week asking the Biden administration to step in to prevent a strike, saying the country relies on moving both imports and exports through these ports.
“The last thing the supply chain, companies and employees… need is a strike or other disruptions because of an ongoing labor negotiation,” read the letter.
The letter does not explicitly spell out what action needs to be taken, but it implies President Joe Biden should exercise powers under what is known as the Taft-Hartley Act, which became law in 1947. President George W. Bush applied the act in 2002 to halt an 11-day lockout of union members at West Coast ports.
But Biden told reporters Sunday he has no intention of using the powers he has under Taft-Hartley.
“No,” Biden said. “Because it’s collective bargaining, and I don’t believe in Taft-Hartley.”
It’s also not clear if simply ordering the union members back to work would actually get the cargo moving over the docks.
There are numerous ways the workers can slow the flow of freight while strictly following rules in the current contract. In a video posted in early September, the ILA’s Daggett said if members were forced back to work, they would likely only move a small fraction of their normal cargo volumes.
“Do you think when (members) go back to work, that those men are going to go to work on that pier?” he said on the video message. “It’s going to cost the companies money to pay their salaries, while it goes from 30 moves an hour to maybe eight.”
The shipping lines realize the problem with having Biden order the union back to work, said Peter Tirschwell, vice president of global intelligence and analytics at S&P Global Market Intelligence and chairman of the TPM shipping conference.
“A senior ocean carrier guy told me yesterday, ‘If they are forced back to work, they can make life miserable for everybody,’” he told CNN last week.
This story has been updated with additional information.
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