The International Longshoremen’s Association (ILA) has announced that strikes are likely starting October 1st at ports along the East Coast of America and the Gulf of Mexico.
The ILA, the largest union in the North American longshore industry, has informed the United States Maritime Alliance (USMX) that the current agreement between the two organizations, which expires on September 30, 2024 and has been in effect for six years, will not be extended.
The ILA, which negotiates on behalf of workers at three dozen U.S. ports from Maine to Texas that handle about 50 percent of the country’s maritime imports, has warned that its members are prepared to walk off the job if they do not get a renegotiated contract by that date.
The USMX wants to avoid a strike, which it says would be unnecessary and costly to both parties. However, some local negotiations remain blocked (notably in Mobile, Jacksonville, Tampa and Philadelphia) and the ILA remains firm in its desire to resolve them before starting the negotiation of the global framework contract. A new agreement before October 1 therefore seems unlikely.
Causes of the Conflict
The main points of contention between the ILA and USMX are wage increases, health benefits, and the use of automated terminal technologies.
The ILA points to the weakening of job security due to automation, while the USMX assures that their wage proposals are industry-leading and that modernized practices can increase efficiency while securing jobs.
Wage Increase Claims
The ILA is demanding wage increases in order to offset current inflation, but also as a logical compensation for employees for the extraordinary profits made by ocean carriers during the COVID19 pandemic in previous years.
Western port workers won a 32% wage increase in their June 2023 renegotiation. The USMX is willing to match that amount, but East Coast and Gulf Coast longshoremen don’t think it’s enough.
Port Automation in Question
ILA representatives remain firmly opposed to automating ports in Eastern America. While they support some technologies because they make work more efficient, they demand that tasks remain done by a human being. They are radically opposed to robots taking over the entirety of humans and have no faith in promises of alternative ways to compensate existing workers.
For the USMX, however, this focus on banning automation would necessarily make American imports more expensive and American exporters less competitive in global markets. Failure to move toward greater efficiency at U.S. ports (ships held for shorter periods of time) could lead shipping lines to seek alternatives outside the United States, according to the USMX.
Consequences
It is estimated that for every week of potential strike, 1.7% of the global container fleet would remain blocked.
The immediate effects would likely be longer delays and possible rerouting of cargo to avoid the ports affected by the strike.
This would result in a significant increase in traffic at the Canadian ports of Halifax and Montreal, primarily due to their proximity to rail carriers, making them ideal for inbound and outbound cargo.
The additional transit days, double border crossings, maritime operations at Halifax and rail operations at Huron, Michigan would undoubtedly cause shipment delays, increased transportation costs and even stockouts are serious concerns.
Given the sheer volume of goods moving through ports on the US Atlantic coast and the Gulf of Mexico, the consequences could significantly disrupt global trade, creating bottlenecks that would delay shipments of everything from perishable goods to raw materials for manufacturing.
A possible intervention by President Biden?
In theory, like any US president, Joe Biden has the power to intervene in labor disputes that threaten national security under the federal Taft-Hartley Act. By invoking this law, an 80-day cooling-off period could be imposed, forcing workers to work while negotiations continue.
However, according to the Biden administration, it has no intention of invoking a federal law to prevent a strike at the ports and, for now, is only encouraging the parties to stay at the negotiating table.
Even if the Taft-Hartley Act were invoked, it would not solve the problem, it would simply postpone the deadline.
What to do in the event of a strike?
In the event of a major strike in the seaports of Eastern America, precautions should be observed and alternatives explored:
- Alternative routing and routing solutions: use West Coast ports or Canadian ports to minimize delays.
- Effective communication: work with professionals who can report on the status of deliveries in real time, to best prepare for possible delays and unforeseen events.
- Customs and compliance expertise: plan to be able to manage administrative formalities in any situation and in any country.
- Risk management planning: assess supply chains, identify vulnerabilities and prepare for the possibility of port closures.
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