Updated October 01, 2024 at 15:05 PM ET
BALTIMORE — Union dockworkers along East Coast and Gulf Coast ports are on strike, halting the movement of billions of dollars' worth of goods including furniture, paper, shoes, manufacturing components, farm machinery and much more.
The pickets began just after midnight Tuesday, after talks between the International Longshoremen's Association (ILA) and the United States Maritime Alliance (USMX), which represents ocean carriers and port operators, failed to yield a new contract.
On Monday, the U.S. Maritime Alliance said it had offered the union raises of nearly 50% and a tripling of retirement contributions, as well as the same restrictive language around automation that was in the last contract. That includes a ban on fully-automated equipment and a requirement that any use of semi-automated equipment be negotiated.
On Tuesday afternoon, ILA President Harold Daggett outlined publicly for the first time the union's demands, which include a 77% pay raise.
“We are now demanding $5 an hour increase in wages for each of the six years of a new ILA-USMX Master Contract,” said Daggett. That would raise the top hourly wage from $39 to $69 by 2030. “Plus, we want absolute airtight language that there will be no automation or semi-automation."
The two sides have not met face-to-face since June.
Despite pressure from House Republicans and more than 170 industry groups, who warned that a strike will have a devastating impact on supply chains and the broader economy, the Biden administration is standing firm in its decision to let the collective bargaining process play out.
"I don't believe in Taft-Hartley," President Biden told reporters on Sunday, citing the federal law that allows the President to call for an 80-day cooling off period when the nation's safety is at risk.
Billions of dollars' worth of goods in limbo
How big an economic impact the strike will have depends on how long it lasts.
The strike affects work at 14 ports along the East and Gulf Coasts, according to the U.S. Maritime Alliance. They are the Ports of Boston, New York/New Jersey, Philadelphia, Baltimore, Norfolk, Wilmington, Charleston, Savannah, Jacksonville, Miami, Tampa, Mobile, New Orleans and Houston.
More than $2 billion worth of goods typically flow through these ports daily, from chemicals and clothing to bourbon and bananas.
That includes more than half of all cargo containers coming into the U.S., or about a million containers a month. It also includes more than three-quarters of the containers carrying exports out — about 327,000 per month — according to the freight-tracking company Vizion.
Those volumes dropped sharply in recent days in anticipation of the strike.
“If it goes on for weeks, it’s going to be a massive headache,” said Vizion CEO Kyle Henderson. “If it’s just days, it’s probably just a blip.”
Trade groups warned in a letter to President Biden that an extended strike would have dire consequences for the U.S. economy.
“It is imperative that the parties return to the table without engaging in disruptive activities that could harm the economy and the millions of businesses, workers and consumers who rely on the seamless flow of goods, both imports and exports, through our East Coast and Gulf Coast ports,” the groups’ letter said.
The Distilled Spirits Council of the United States notes more than three-quarters of imported liquor typically flows through the affected ports, along with more than 40% of the American spirits sold overseas. Halting those shipments could be particularly costly in the run-up to the Christmas shopping season.
“Consumers love to buy your favorite bottle of American whiskey or scotch or Irish whiskey or cognac as holiday gifts," says Chris Swonger, the council's CEO. "Even a day’s strike could have repercussions along the line."
Companies seek alternate routes
Companies have made contingency plans to blunt some of the economic impact.
Ryan Petersen, CEO of Flexport, a freight forwarding company, says customers already have diverted cargo to the West Coast in anticipation of the work stoppage.
"Really starting at the beginning of the year, it became very clear that this was going to be a major issue," says Petersen.
In recent days, he says, Flexport's focus has been on getting cargo out, so as not to incur hefty fees for containers left at East and Gulf Coast ports, and shoring up operations at West Coast ports in anticipation of a surge of activity.
Goods that are already on ships headed to ports affected by the strike will just have to sit offshore until the strike is over, Petersen says.
“The reality is, there’s only so much you can do,” says Jeff Sloan of the American Chemistry Council, whose members rely heavily on ports along the Gulf Coast and in New Jersey and New York. “For large volume materials like plastic resins, there’s just no way to feasibly divert that to other ports or to ship it in some other way.”
Far apart on wages
On wages and automation, the two sides still don't appear to be that close to a deal.
Throughout the negotiations, the union has argued that the shipping industry can afford to pay dockworkers more given the massive profits it made in recent years, a point Biden concurred with in a statement released on Tuesday.
"Now is not the time for ocean carriers to refuse to negotiate a fair wage for these essential workers while raking in record profits," he wrote.
Wage increases under the last contract, signed in 2018, were far more modest, with only $1-an-hour increases in four of the six years, bringing the top hourly wage to $39.
Jobs at the ports have traditionally been among the best-paying blue-collar jobs in the country, often topping $100,000 a year. But Daggett says the port operators should pay workers more.
"When they made their most money was during COVID, when my men had to go to work on those piers every single day," he says in a video posted by the union. "They died out there with the virus. We all got sick with the virus. We kept them going.”
Fears about replacing humans with machines
On automation, Daggett has been warning dockworkers that the foreign companies that operate the ports are seeking to replace them with machines.
The union's demand for an "absolute airtight" ban on automation or semi-automation appears impractical, given some of this technology already exists at ports on the East and Gulf Coasts, where, for example, trucks entering or exiting the ports pass through automated gates where containers are scanned and processed.
At some ports around the world and even on the West Coast, this kind of automation and more is already in wide use.
There's no doubt that some jobs are lost when the work is automated, but how many isn't entirely clear. The shipping industry, backed by researchers at UC Berkeley, argues that automation helps ports stay competitive and handle more goods, which in turn creates demand for highly skilled workers.
Tricky situation for the White House
It's yet to be seen whether Biden's clear support for the union in this labor dispute helps to soften some of the hard feelings union president Daggett has toward his administration.
In a video posted just a month ago, Daggett asked, "Where's the president of the United States? He's not fighting for us."
The sharp rebuke came nearly four years after Daggett endorsed Biden in the 2020 election, citing his friendship and support while criticizing former President Trump for filling courts with anti-union judges and supporting so-called right-to-work laws, aimed at weakening unions.
In July, shortly after the first assassination attempt on Trump, Daggett posted a photo of himself with Trump, offered prayers on behalf of the union membership, and recalled "a wonderful, productive 90-minute meeting" at Mar-a-Lago with Trump in November 2023.
"I expressed to President Trump the threat of automation to American workers,” he wrote. “President Trump promised to support the ILA in its opposition to automated terminals in the U.S. Mr. Trump also listened to my concerns about Federal 'Right To Work' laws.”
While Biden and Vice President Harris have the support of the leaders of most labor unions, the same is not true for many rank-and-file union members.
In 2022, freight rail workers were deeply angry with Biden for signing a measure that imposed a contract on them, blocking a nationwide rail strike.
Copyright 2024 NPR
