Contract negotiations began in February 2023, according to the Freightwaves publication. However, ILA President, Harold Daggett ended the talks prematurely, asserting that USMX companies allegedly violated its agreement promising not to automate human jobs. USMX states on its website that it has already "successfully negotiated ten new contracts with ILA without a coast-wide work stoppage."
The three dozen ports affected by the East Coast strike are Boston, New York/New Jersey, Philadelphia, Wilmington, North Carolina, Baltimore, Norfolk, Charleston, Savannah, Jacksonville, Tampa, Miami, New Orleans, Mobile, and Houston. White House officials say the president does not plan to step in to help negotiate an end to the strike. Dock workers can earn more than $200,000 a year, but their work involves the "dangerous and physically exhausting job of moving containers on and off vessels."
The walk-out may be one of the most crippling work stoppages in decades, affecting the delivery of all manner of household and commercial goods. Americans may be looking at devastating supply chain issues right before the 2024 election and the upcoming holiday season.
The 1977 ILA strike lasted 45 days, but the impact was not as profound. In 1977, the economy was not as globalized as it is now. ILA union members in 1977 successfully negotiated a hefty pay hike and, before that, in 1964, negotiated "guaranteed annual income (GAI) for union workers" whether on the job or not. According to the Washington Post, global trade "accounted for just 16 percent of the U.S. economy, far below the current 27 percent, according to the World Bank." The strike affects "a little over half the nation's trade in shipping containers."
According to one estimate from JP Morgan, every day the strike continues costs the U.S. economy between $3.8 billion to $4.5 billion a day, "with some of that recovered over time after normal operations continue." The strike comes at a particularly difficult time when many Americans in Eastern states are trying to resupply and rebuild after the devastating effects of Hurricane Helene.
However, the story is more profound for some working Americans than a supply shortage. It involves what some see as an international sellout of American workers in favor of automation. Not only are dock workers demanding higher wages, but they are, by some accounts, standing up against corporations that are attempting to replace human jobs with machines. Many industry leaders believe port jobs should be fully automated. Those jobs include operating cranes and moving containers around.
A guide published in 2020 by Thetius.com looks at both sides of the coin.
The guide goes on to explain that the "financial, environmental, and safety benefits of port automation are inarguable. However, the implications for some employees are unavoidable. Erwin Rademaker, a programmer manager at the Port of Rotterdam, explains, 'Autonomous isn't the same as unmanned. But if objects are talking with each other and making autonomous decisions, certain jobs will disappear. While that's true, automated ports create jobs in maintaining and supervising the robots. Rather than seeing the shortage of skilled people for these roles as a barrier, ports can upskill their existing workforce as part of the transition."
Three terminals in Los Angeles and Long Beach are considered fully automated. A 2022 study funded by the International Longshore and Warehouse Union Coast Longshore Division, which represents West Coast dockworkers, found that 572 jobs a year were eliminated after the automation of ports in California. The study also maintains that "productivity of automated ports is 7-15 percent lower than for non-automated ports," and most of the profits go to foreign owners.
Whether you believe in the automation of ports or not, the fact remains that the union means to raise wages and secure human jobs. In a Sept. 20, 2024, press release, ILA's boss Daggett maintained that his Longshore workers "never took a day off" during the pandemic. He blames Foreign-owned companies for "disrespecting" his workforce and "increasing surcharges while using external crises as an excuse." Daggett cited a shipper "who normally pays $8,000 to ship a container from Asia to New Jersey" just paid $30,000 to do the same route. Daggett also railed against governments that do not "stand up for American workers" but instead support "foreign-owned corporations."
USMX and ILA have been trading counteroffers related to wages and other issues over the past few days. There is yet to be a settlement even though USMX increased its offer, promising a "nearly" 50-percent increase in wages over the next six years, would triple employer contributions to retirement plans, strengthen health care options, and keep the "current language" that limits automation and semi-automation of dock worker jobs.
There are 13 members on the USMX board, seven of which represent foreign shipping firms; one represents Chinese interests (COSCO); three represent port associations in the U.S., and three are direct employees, one of whom is Canadian.
On Oct. 1, President Biden "urged USMX" to "come to the table and present a fair offer" to ILA workers but stopped short of invoking the Taft-Hartley Act, which would force workers to go back to work during which there would be an 80-day cooling off period while negotiations continue.
