Market Matters Blog
US East Coast and Gulf Coast Port Strike by ILA Union Appears Imminent
MINNEAPOLIS (DTN) -- Fears are increasing that the International Longshoremen's Association (ILA) and the United States Maritime Alliance Ltd. (USMX) will likely not reach an agreement on their current contract that expires at the end of the month, opening the door for a strike at East Coast and Gulf Coast ports.
USMX has been in master contract bargaining with the International Longshoremen's Association, AFL-CIO, since May 2024. As of Sept. 15, the ILA has rejected USMX offers.
The ILA represents more than 85,000 people. The current six-year contract expires on Sept. 30, 2024, and covers approximately 45,000 port workers employed in container and roll-on/roll-off (cargo ships designed to carry wheeled cargo) operations at ports from Maine to Houston. A strike by ILA is planned for Oct. 1, 2024, if negotiations fail.
CNN reported on Sept. 4, "U.S. East Coast and Gulf Coast ports handle 43% of all U.S. imports and billions of dollars in trade monthly, but companies have been moving shipping containers to the West Coast over strike fears."
ILA President Harold Daggett and ILA Executive Vice President Dennis Daggett cosigned a message to the ILA's 85,000 members on Sept. 7, providing them with the stark message that the two sides were far apart on many issues and warned ILA longshore workers against USMX's propaganda campaign "designed to mislead and divide us."
USMX's contract proposal, they charged, failed to recognize the current economic conditions, including inflation that ILA longshore workers and their families face in 2024. The ILA leaders attacked USMX's claim that they were offering industry-leading wages.
"Their interpretation of 'leading wages' is polar opposite to ours," the ILA leaders said. "Inflation has completely eaten into any raises and wages. Everything has become more expensive, even compared to six years ago. Our members are struggling to pay their mortgages, rent, car payments, groceries, utility bills, taxes, and in some cases, their children's education. USMX's corporate greed has made them delusional -- profits over people. They have taken advantage of a low entry wage and a tiered progression system for 30 years. We outright reject their position on the new entry wage."
The union leaders further charged that USMX was "trying to fool you with promises of workforce protections for semi-automation."
"We don't want any form of semi-automation or full automation," the ILA said. "We want our jobs -- the jobs we have historically done for over 132 years." (https://ilaunion.org/…)
On Sept. 5, USMX posted this statement on its website: "USMX remains committed and prepared to resume negotiations with the ILA on a new Master
Contract before the current agreement expires and to avoid a strike. The ILA continues to strongly signal it has already made the decision to call a strike and we hope the ILA will reopen dialogue and share its current contract demands so we can work together on a new deal, as we have done
successfully for nearly 50 years." (USMX current contract offer: https://www.usmx.com/…)
On Sept. 13, USMX on its website stated: "There has been no further progress on Master Contract negotiations -- we remain committed to the
bargaining process and need the ILA to return to the table. While there are fewer than three weeks remaining until the expiration of our current agreement -- if the ILA is willing to meet -- it is still possible to agree to terms on a new Master Contract. We need to sit down and negotiate a new agreement that avoids an unnecessary and costly strike that will be detrimental to both sides."
IMPACTS ON AGRICULTURE
"While bulk soybean and grain export facilities in the Gulf, East Coast, and Great Lakes have a variety of different arrangements for the workforce that loads ships (own company employees, different labor union, etc.), the negotiations between the ILA and the USMX would not impact the overwhelming majority of soybean and grain exports from the Gulf or East Coast," said Mike Steenhoek, executive director of the Soy Transportation Coalition.
"However, it would impact the soybeans, soybean meal, and other agricultural products that are exported via container. It also would have a significant impact on chilled or frozen meat, eggs, etc. that are exported from the U.S. Of course, the U.S. livestock industry cannot be harmed without simultaneously harming soybean and grain farmers. We therefore strongly encourage both parties to come to an agreement that hopefully benefits both sides without any disruption of service," Steenhoek said.
2023 Exports of U.S. Soybeans via Container:
-- Norfolk: 1,616,854 metric tons
-- New York/New Jersey: 372,110 metric tons
-- Baltimore: 324,500 metric tons
-- Charleston: 217,892 metric tons
-- Wilmington, North Carolina: 47,744 metric tons
-- Savannah: 43,710 metric tons
-- Houston: 24,758 metric tons.
Source: U.S. Department of Agriculture
INCREASING POLITICAL PRESSURE
"Given how we are in a presidential election year, there will clearly be increasing pressure being directed towards our elected leaders as the probability of a strike or lockout increases," Steenhoek said. "The Labor Management Relations Act of 1947 -- more commonly known as the Taft-Hartley Act -- allows presidents to seek injunctions against strikes or lockouts if they imperil the national health or safety."
In a Sept. 10 article on its website, Gary Williams, SSGA director of transportation and regulatory affairs for the Specialty Soya and Grains Alliance, wrote, "With the election on the horizon, the Democratic Party (often considered pro-union) could face potential political backlash from unions if President (Joe) Biden chooses to intercede, while standing aside could disrupt 60% of the U.S. container volume, valued at $588 billion annually.
"The disruption is too great not to affect all other ports, and customers should be made well aware that West Coast execution will most likely experience significant challenges should the strike go into effect for even a short period of time." (https://soyagrainsalliance.org/…)
In 2002, President George W. Bush utilized the Taft-Hartley Act to intervene in the 11-day shutdown of West Coast ports, stating that the ports were "vital to our economy and to our military."
Mary Kennedy can be reached at mary.kennedy@dtn.com
Follow her on the social platform X @MaryCKenn
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