Workers at ports on the East and Gulf Coasts went on strike Tuesday following a breakdown in negotiations between the union representing them, the International Longshoremen’s Association (ILA), and the organization of international shipping companies that employ them.
Approximately 45,000 workers walked off the job at 12:01 am, making it the most significant strike the union has engaged in since 1977. On Tuesday, workers at 36 different ports stopped work after their six-year contract with the United States Maritime Alliance (USMX) expired — and depending on how long the work stoppage lasts, it could have a monumental impact on the US economy.
The strike affects some of the country’s biggest ports, like the Port Authority of New York and New Jersey. Overall, the affected ports handle about 50 percent of the imports and exports to the US. Though some of that cargo has been preemptively diverted to the West Coast, that isn’t a solution without complications.
In recent days, it appeared as though USMX and ILA were moving forward with negotiations, with USMX requesting to extend the current contract to garner more negotiating time. ILA, though, refused the new proposal.
ILA president Harold Daggett warned Tuesday that the union was “prepared to fight as long as necessary, to stay out on strike for whatever period of time it takes, to get the wages and protections against automation our ILA members deserve.”
The ILA represents the approximately 45,000 workers who manage the unloading of massive shipping containers from large cargo ships. Eventually, inventory from the ships makes its way to warehouses, store shelves, and factories. The members work at ports up and down the East Coast as far north as Maine, as well as Gulf Coast ports in Louisiana and Texas.
“There’s a strike over two main issues,” Art Wheaton, director of labor studies at the Cornell University School of Industrial and Labor Relations, said. “One is money. Two is technology.”
The union has demanded a significant pay raise for dock workers over the six-year life of the contract, as well as increased contributions to their retirement plan and a say in the role of automation in their industry. Some reports indicate the union asked for as much as a 77 percent pay increase; the most recent proposal from USMX offered a 50 percent increase over the life of the contract.
“The biggest concern is, the dock workers do not want automated machines to be responsible for picking up, dropping off, and releasing the cargo automatically,” Wheaton said. “They would like to have a human operator there” to ensure the quality and safety of their operations — and job security.
Negotiations between USMX and ILA for a new contract stopped in June, reportedly over the use of automation at a port in Mobile, Alabama. USMX filed a complaint with the National Labor Review Board last week claiming that ILA refused to continue with contract negotiations. USMX did not respond to Vox’s request for comment.
Shipping companies that compose USMX — all of which are based abroad — have made billions as global trade and shipping has boomed, the union argues, while worker wages have stagnated in the face of inflation.
Dock workers on the West Coast make about $55 per hour compared with the East and Gulf Coast average of $39 per hour for experienced workers. West Coast dockworkers received an impressive wage increase in their most recent contract; they belong to a different union, the International Longshoremen and Warehouse Union (ILWU), which has long been much more radical than the ILA in terms of its politics, demands, and tactics, according to Gabe Winant, a labor historian at the University of Chicago.
But the ILWU workers’ big wage wins proved that it was possible to demand more — and get it.
Now, the ILA hopes to achieve a similar victory.
More than 50 percent of all goods imported into the US using container ships come in through the East and Gulf Coast ports, and nearly 70 percent of containerized exports leave through them. In the immediate term, there should be few shortages or price increases on most consumer goods; many companies have made preparations for the strike. But depending how long the strike continues, some perishable items might be more expensive or difficult to come by.
“We have all these perishable goods coming imported [to] the East Coast,” like blueberries, bananas, and fish from South America, Chris Tang, a professor of supply chain management at UCLA, told Vox. “We also have apparel, toys, electronics, we import through the East Coast.”
The automotive industry is also likely to be impacted, as many cars and car parts are imported from Europe. “There’s still some inventories available in the car manufacturing, and as well as the car dealers, so in the short term, it is not a major impact,” Tang said. But if the strike goes on for weeks, that inventory will run out, and car repairs could become more challenging as parts shipments are delayed.
In addition to the strike, there are other factors affecting global shipping at the moment, including Houthi attacks in the Red Sea that have disrupted shipping since November of last year, as has extreme weather. The Panama Canal has also been impacted independent of the strikes; the waterway is suffering from a drought, which has created a shipping backlog there.
“As anyone who tried to buy toilet paper during the pandemic can tell you, we have a delicate supply chain, and when you start messing with the cargo ships, the rail, and the semi trucks, you’re toast,” Wheaton said. “You just aren’t going to get anything moved. Add to that that you just had a huge chunk of the East Coast get buried in water from the hurricane that just went through.”
Overall, consumers shouldn’t worry too much about goods becoming scarce. For now, Tang cautions people not to hoard products for fear that they’ll be absent from US shelves; that will create shortages and drive up prices independent of the strike.
What happens with the strike largely depends on how quickly the ILA and USMX can come to an agreement.
Federal law gives Congress and the president the power to break strikes in certain circumstances. In this case, President Joe Biden could order dockworkers back to the ports for 80 days as USMX and the ILA continue contract negotiations through powers granted by the Taft-Hartley Act, but he doesn’t want to do so.
Tang cautions that could change the longer the strike goes on, given it could continue till the presidential election.
The administration will face “pressure from the consumers, from the retailers, from the manufacturers, and also the shipping companies” to take action and reopen the ports, Tang said. Some business groups are already calling on Biden to send ILA members back to work. But Biden has also been largely supportive of union action, save the 2022 railway workers strike, and a number of unions are helping with Vice President Harris’s campaign.
“I think that right now, President Biden is under large pressure,” Tang said.
Ideally, the administration won’t have to act, with ILA and USMX coming to an agreement either on their own or with US officials assisting with negotiations.
“The official policy of the government for more than 100 years, that the best solution is a negotiated solution,” Wheaton said. “The union won’t get everything they want, management won’t get everything they want, but you sit at the bargaining table to see what both sides can live with.”
