Longshoremen are on strike, disrupting traffic at East and Gulf Coast ports

Updated October 1, 2024 at 02:11 ET

BALTIMORE – EU longshoremen along East Coast and Gulf of Mexico ports began picketing Tuesday morning, halting the flow of billions of dollars’ worth of goods, including furniture, paper, footwear, manufacturing components, agricultural machinery and much more.

Pickets began just after midnight 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 produce a new contract.

“USMX sparked this strike when it chose to maintain its position against foreign ocean carriers making billions of dollars in U.S. ports, but not to compensate American ILA longshore workers who perform the jobs that make them wealthy,” ILA President Harold Daggett said in a statement published early Tuesday.

The two sides have not met face-to-face since June. They seem to differ on key issues. On Monday, the alliance asked for an extension, to which the union did not respond.

Despite pressure from House Republicans and more than 170 industry groups that warned the strike would have a devastating impact on the economy, the Biden administration stands by its decision to allow collective bargaining to proceed.

Spencer Platt/Getty Images North America

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Getty Images North America

“I don’t believe in Taft-Hartley,” President Biden told reporters on Sunday, citing a federal law that allows the president to call for an 80-day grace period when the nation’s security is threatened.

Billions of dollars worth of goods in limbo

The economic impact of a strike depends on how long it lasts.

The strike is affecting work at 14 ports on the East Coast and the Gulf Coast, according to the U.S. Maritime Alliance. These include ports in 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 pass through these ports every day, from cars and clothing to bourbon and bananas.

This includes more than half of all cargo containers arriving in the U.S., or about one million containers per month. It also accounts for more than three-quarters of containers exported – about 327,000 per month – according to shipment tracking company Vizion.

In recent days, in anticipation of the strike, this number has dropped dramatically.

“If this goes on for weeks, it’s going to be a huge headache,” Vizion CEO Kyle Henderson said. “If it’s just days, it’s probably just blips.”

Trade groups warned in a letter to President Biden that a prolonged strike would have dire consequences for the US 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 smooth flow of goods, both imported and exported, across our East Coast and the Gulf Persian Coastal Ports,” we read in the groups’ letter.

The U.S. Distilled Spirits Board notes that more than three-quarters of imported alcohol typically flows through affected ports, as well as more than 40% of U.S. spirits sold abroad. Stopping these deliveries can be especially costly in the run-up to the holiday shopping season.

“Consumers love buying their favorite bottle of American whiskey, Scotch, Irish whiskey or cognac as holiday gifts,” says Chris Swonger, the council’s chief executive. “Even a one-day strike can have consequences.”

Companies are looking for alternative routes

Companies have prepared contingency plans to mitigate some of the economic impact.

Ryan Petersen, CEO of shipping company Flexport, says customers have already redirected cargo to the West Coast in anticipation of the shutdown.

“It actually became clear at the beginning of the year that this was going to be a serious problem,” Petersen says.

He says Flexport has been focused in recent days on offloading cargo to avoid paying high fees for containers left at ports on the East Coast and Gulf of Mexico, as well as supporting business at West Coast ports in anticipation of an increase in activity.

Goods already on ships bound for strike-affected ports will simply have to remain at sea until the strike ends, Petersen says.

“The reality is there’s not much that can be done,” says Jeff Sloan of the American Chemistry Council, whose members make heavy use of ports along the Gulf Coast and in New Jersey and New York. “For bulky materials like plastic resins, there is simply no way to divert them to other ports or ship them in other ways.”

We are far from making money

The two main sticking points are wages and automation.

In a statement on Monday, the U.S. Maritime Alliance said the two sides exchanged counteroffers on pay over the past 24 hours.

The alliance said its latest offer would increase wages by almost 50% and triple contributions to employee pension plans.

The International Longshoremen’s Association rejected earlier offers, calling them “stingy” because of the shipping industry’s huge profits in recent years.

“Even a $5-an-hour wage increase in each year of a six-year contract represents only an average annual increase of about 9.98 percent,” union president Daggett said last week.

Wage increases under the last contract signed in 2018 were much more modest, with increases of just $1 an hour in four of the six years, bringing the top hourly wage to $39.

Port jobs have traditionally been among the highest-paying blue-collar jobs in the country, often exceeding $100,000 a year. But Daggett says port operators should pay workers more.

“The most money they made was during Covid-19 when my guys had to work on these wharves every day,” he says in a video released by the union. “They died there with the virus. We all got sick from the virus. That’s how they survived.”

Fear of replacing humans with machines

On automation, Daggett warned longshoremen that foreign companies operating the ports were trying to replace them with machines.

The United States Maritime Alliance said it proposes to maintain the current ban on fully automated equipment and the requirement to negotiate all uses of semi-automated equipment.

On Tuesday, Daggett responded in a statement saying the alliance’s latest offer “falls significantly short of the demands of rank-and-file ILA members for pay and protections from automation.”

In ports around the world, and even on the West Coast, advanced technology is already being used to transport shipping containers.

It is not entirely clear how many jobs will be lost as a result of the transition to automated terminals. The shipping industry, backed by researchers at the University of California, Berkeley, says automation helps ports stay competitive and handle more cargo, which in turn creates demand for highly skilled workers.

A difficult situation for the White House

The Biden administration says it encourages all parties to continue negotiations and negotiate in good faith.

On Friday, Transportation Secretary Pete Buttigieg and acting Labor Secretary Julie Su met with representatives of shipping companies. They “have been in contact” with the longshoremen’s union throughout the past week, according to the White House.

It’s clear the union wasn’t happy with Biden.

“Where is the president of the United States? He is not fighting for us,” Daggett said in a video released by the union in September.

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 packing the courts with anti-union judges and supporting so-called right-to-work laws that aim to is the weakening of trade unions. .

In July, shortly after Trump’s first assassination attempt, Daggett posted a photo of himself with Trump, praying on behalf of union members and recalling a “wonderful, productive 90-minute meeting” with Trump at Mar-a-Lago in November 2023 .

“I expressed to President Trump the threat of automation to American workers,” he wrote. “President Trump has promised to support the ILA in its opposition to automated terminals in the US. Trump also listened to my concerns about the federal “right to work.” laws.”

While Biden and Vice President Harris have the support of most union leaders, the same is not true of many rank-and-file union members.

In 2022, freight rail workers were deeply angry with Biden for signing a measure forcing their contract, blocking a nationwide rail strike.

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