Negotiations between longshore workers and the shipping industry are mired in impasse with the workers' union contract expired on September 30, all but guaranteeing a strike Tuesday that will halt activity at the busiest U.S. ports and disrupt an already fragile economy.
Leaders of the International Longshoremen’s Association (ILA), a union covering 47,000 workers along the East and Gulf Coasts, have not called an all-ports strike since 1977. But the United States Maritime Alliance (USMX), the employers' negotiating group, has this time refused to meet the ILA's demands for higher compensation and a ban on automated cranes, gates and container-moving trucks that are traditionally handled by the workers.
Under the current contract, longshoremen earn a top rate of $39 an hour. The ILA wants a $5-an-hour raise for each of the six years covered by the new contract to help workers catch up with inflation. That would give them a maximum of $69 an hour in the final year of the contract, and perhaps an annual income of $200,000 with overtime and shift work, compensation that the longshoremen claim is well-deserved for all the long shifts they have to put in to keep goods moving.
The shipping industry made windfall profits in 2021 and 2022 before seeing a subsequent drop-off as war disrupted trade along the Red Sea. Despite a swift recovery that landed more record profits in 2024, USMX has not agreed to conditions they view as unreasonably generous.
“The Ocean Carriers represented by USMX want to enjoy rich billion-dollar profits that they are making in 2024, while they offer ILA Longshore Workers an unacceptable wage package that we reject,” the ILA said in a statement on Monday.
The two sides haven't held public talks since June, when communication broke down over union allegations that Mobile, Alabama and several other unnamed ports had automated the processing of trucks entering and leaving the facilities even as the status of automation was being discussed. USMX, insisting that the automation technology had been in use since 2008, asked the National Labor Relations Board to force the ILA back to the negotiating table. However, it will likely take weeks for the board to investigate the ILA's claims of foul play.
“We remain prepared to bargain at any time, but both sides must come to the table if we are going to reach a deal, and there is no indication that the ILA is interested in negotiating at this time,” USMX said in a statement September 25.
Despite concerns about what automation might portend for their livelihoods in the future, the longshoremen know that right now the ports still need their labor to function; there is no practical alternative in the eastern half of the United States for employers to rely on instead.
In the event of a strike, the absence of longshoremen to unload and process most cargo containers along the East and Gulf Coasts would prevent shipments from reaching businesses, potentially raising prices and causing shortages in a vast array of goods, from groceries to cars during the peak of holiday shipping season. If the strike is resolved within a couple of weeks the effect might be minimal — any longer, and the backlog and extra warehouse storage costs will be more difficult to overcome. Some companies have been pulling forward shipments and diverting them to West Coast ports in anticipation.
This is all bad news for the Democratic Party, coming just one month before the election, as voters may blame President Joe Biden for any economic troubles that ensue. Biden can use federal labor law enshrined in the Taft-Hartley Act of 1947 to force the longshoremen back to work for 80 days, during which negotiations may continue. But the president, who has long described himself as an ally of labor, has shown no interest in invoking the law, which allows him to intervene in strikes deemed threatening to the national economy, instead directing his administration to pressure both sides to reach a deal.
“Because it’s collective bargaining, I don’t believe in Taft-Hartley,” Biden told reporters Sunday. He urged Congress to halt a freight rail strike in 2022, provoking backlash for "siding with billionaires" over workers, though the latter eventually got much of what they asked for. This time, he appears to have chosen a different tack.
