Shipping companies issue advisories urging customers to make contingency plans in event of a dockworker strike.
January 3, 2025
By Kristin Bakker
The deadline is fast approaching in the ongoing contract negotiations between the International Longshoreman Association (ILA) and the U.S. Maritime Alliance Ltd. (USMX).
USMX represents maritime industry employers in the nation’s ports stretching from Maine to Texas that are responsible for the transportation and handling of cargo shipped to and from the U.S., while ILA represents longshoremen, clerks, checkers and maintenance employees working on ships and terminals in ports on the U.S. East and Gulf coasts.
The USMX-ILA Master Contract, the most recent six-year agreement covering ILA port workers employed in container and roll-on/roll-off operations at ports on the U.S. East and Gulf Coasts, ran from Oct. 1, 2018, to Sept. 30, 2024.
After a three-day port shutdown, the two parties reached a tentative agreement on wages on Oct. 3 and extended the Master Contract until Jan. 15, 2025, but discussions on technology-related issues stalled negotiations when ILA and USMX met in November.
USMX tentatively agreed to a 62% wage increase for ILA members over the next six years, which it noted is contingent upon finalizing all outstanding issues and represents “a historic leading wage increase that showcases our commitment to American workers.”
The Master Contract extension bought the parties more time to return to the bargaining table to work out the other outstanding issues, but unless a new agreement is reached by the deadline, the possibility of a port worker strike on Jan. 16 looms large.
In a message posted on the ILA website in December, Dennis A. Daggett, executive vice president of ILA, president of ILA Local 1804-1 and general coordinator of the International Dockworkers Council, said, “At the center of this impasse is the employers’ push to expand the use of semi-automated rail-mounted gantry cranes (RMGs). The ILA is not against progress, innovation or modernization, but we cannot support technology that jeopardizes jobs, threatens national security and puts the future of the workforce at risk.”
Daggett cautioned that automation via interconnected systems represents more than “just a threat to jobs – it’s a risk to our national security and economy,” making ports more susceptible to cyberattacks and shutdowns.
In its own statement, USMX countered that the key to “successfully reaching a new long-term agreement is how we can also strengthen the ability of USMX members to make critical investments in technology and infrastructure to densify and improve the safety, productivity and efficiency of our ports, which provides a direct benefit to both ILA members and businesses in nearly every sector of the U.S. economy. American businesses rely on continuous improvements at our ports to help streamline their supply chains through expediting cargo turn times, attracting more vessel calls and increasing overall capacity to meet their growing business demands on the export or import side.”
The alliance emphasized that this can be done “in a way that not only protects jobs but adds new jobs as our operations expand.”
Several news outlets have been reporting that negotiations will resume Jan. 7. In response to requests for confirmation, a spokesperson for ILA told Feedstuffs it “is not engaging in interviews while it is in negotiations with United States Maritime Alliance.” USMX did not respond to Feedstuffs’ request for comment.
Shipping companies have been issuing alerts to their customers and urging preparation for the possibility of a worker strike.
In the event of a work stoppage, East Coast and Gulf terminals may halt operations, and gate and rail services could be suspended, according to an update from A.P. Moller-Maersk, an integrated logistics company. In preparation for such a possibly, Maersk urged its customers to pick up laden containers and return empty containers at the East Coast and Gulf ports by Jan. 15 as a “proactive measure that will help mitigate any potential disruptions at the terminals.”
Along the same lines, APL, a provider of ocean transportation and in-country logistics for the U.S. government and its military, said it is working on contingency plans if any labor disruptions were to occur and issued an advisory to customers.
“In the event of a work stoppage, U.S. East Coast and Gulf terminals will halt operations, leading to the suspension of gate and rail services. ... Similarly, terminals and nearby depots will not be open to accept empty returns. Please hold your empties until the terminals and depots reopen,” APL said in its advisory.
The uncertainty is already impacting U.S. red meat exports, according to U.S. Meat Export Federation president and chief executive officer Dan Halstrom, who said ocean carriers have been announcing surcharges related to a potential strike and exporters must evaluate where to divert shipments.
"On the pork side, 45% of our waterborne exports go off the East or Gulf Coast, and on the beef side, 30% of our waterborne exports originate from either the Gulf or the East Coast ports," Halstrom said in a recent report. "For every week of a potential shutdown, it would be a loss in excess of $100 million just on beef and pork exports."
In a grim summary posted Jan. 2 titled “‘High Likelihood’ of Another East, Gulf Coast Port Strike This Month,” University of Illinois Farm Policy News editor Keith Good provided a roundup of sources predicting that a strike is imminent.
The U.S. Chamber of Commerce similarly cautioned about ripple effect an impending strike would have. John Drake vice president, transportation, infrastructure and supply chain policy for the Chamber, warned that the East Coast and Gulf ports service more than half of U.S. imports, and “a second strike could have devastating impacts.”
If a strike lasts more than a few days, “consumers could see shortages and price increases on items like groceries, clothing and electronics, affecting workers and families across America,” Drake reported. “Every day of a strike results in nearly a week of disruptions to the economy. Economists believe a similar disruption in 2002 cost the economy $1 billion per day, and it took six months for the economy to recover.”
In addition, he predicted that small businesses would “face the brunt of the economic fallout from a strike” due to their tighter margins and labor market and higher operating costs.
In December, hundreds of organizations that rely on the ports – representing U.S. manufacturers, farmers and agribusinesses, wholesalers, retailers, restaurants, importers, exporters, distributors, transportation and logistics providers and other supply chain stakeholders – penned a joint letter to ILA’s Daggett and USMX chairman and CEO David Adam urging the groups to resume negotiations with the goal of reaching a new contract.
“We understand that automation and technology continues to be the biggest issue of disagreement between the parties. We continue to believe there is a path forward for the parties to address this issue,” the stakeholder letter stated. “It is critical that our ports and terminals have the ability to modernize their systems and processes in order to remain globally competitive and be able to handle the continuing rise of trade volumes, both imports and exports, through our ports. Modernization can only happen through true partnership between labor and management, as well as the other supply chain stakeholders that rely on these ports.”
You May Also Like
Enter a zip code to see the weather conditions for a different location.
