Market Matters Blog

UPDATED 05:48 a.m. Oct. 1, 2024

At 12:01 a.m. EDT on Oct. 1, members of the International Longshoremen's Association (ILA) walked off the job at 36 ports East Coast and Gulf ports. Roughly half of the goods shipped into and out of the U.S. come from those ports. Besides retail, automotive and other goods shipped by containers, the agriculture sector will be affected as the Renewable Fuels Association (RFA) said 57% of our ethanol exports and 40% of DDG exports go through those ports, along with soybeans shipped by containers and other food items.

A last-ditch effort was made Monday afternoon by the United States Maritime Alliance (USMX) to make a deal, but to no avail.

USMX sent a letter to its member companies Monday afternoon saying it would increase wages by nearly 50%, double employer contributions to employee retirement, and strengthen the health care options, hoping it would lead to the resumption of collective bargaining resuming. But the ILA rejected the offer, stating its wage demands were still not being met.

The ripple effect will be felt as other unions stand with the ILA. Teamsters General President Sean M. O'Brien on X Monday evening said, "The International Brotherhood of Teamsters, including our members in the freight industry, stand in full solidarity with the International Longshoremen's Association as they fight for a fair and just contract with the ocean carriers represented by USMX. Don't forget, Teamsters do not cross picket lines. The Teamsters Union is 100% committed to standing with our Longshoremen brothers and sisters until they win the contract they deserve." See that statement here: https://teamster.org/….

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Original reporting from Sept. 30, 2024

In less than 24 hours, 45,000 workers of the International Longshoremen's Association (ILA) could be going on strike at East Coast and Gulf Ports as their contract with the United States Maritime Alliance, Ltd. (USMX) expires at midnight, Sept. 30, 2024.

A strike would cease container and RoRo (roll on/roll off wheeled cargo) operations at 36 U.S. ports.

To say that negotiations have been contentious is an understatement.

In a Sept. 26 news release on their website, ILA stated: "Continuing its weak publicity campaign designed to fool the American public that they care for the longshore workers who help earn them billions of dollars and are serious about negotiating a new Master Contract Agreement, USMX filed an 'unfair labor practice' charge against the ILA on Sept. 25, 2024."

The ILA added it regards the suit as "another publicity stunt by the employer group, and countered that foreign-owned companies, represented by USMX, that set up shop at American ports, earn billions of dollars in revenues and profits, take those profits out of country, and fail to adequately compensate the ILA longshore workforce for their labor are engaging in a real 'unfair labor practice' and have been getting away with for decades." https://ilaunion.org/…

The USMX, who represents employers of the East and Gulf Coast longshore industry, noted on their website that membership consists of Container Carriers, including the largest carriers and carrier alliances worldwide, all major Marine Terminal Operators, and Port Associations representing each port on the East and Gulf Coasts.

"Since 1977, USMX and its predecessor organizations have successfully negotiated 10 contracts with the International Longshoremen's Association, AFL-CIO (ILA) without any coastwide disruptions to service. On Sept. 25, 2018, USMX and the ILA signed a new 6-year agreement covering 14,500 port workers on the East and Gulf Coasts. The new Master Contract commenced Oct. 1, 2018, and will run through Sept. 30, 2024," noted USMX on their website.

Prior to the Sept. 25 filing, the USMX, in a letter posted on their website, said: "Despite additional attempts by USMX to engage with the ILA and resume bargaining, we have been unable to schedule a meeting to continue negotiations on a new Master Contract. We remain prepared to bargain at any time, but both sides must come to the table if we are going to reach a deal, and there is no indication that the ILA is interested in negotiating at this time.

"USMX has received outreach from the Department of Labor, the Federal Mediation & Conciliation Service (FMCS), and other federal agencies and we will keep them up to date on the status of negotiations. We would be open to working with the FMCS, as we have done successfully in the past, but that is only possible if both sides agree to mediation. Our goal remains the same; we want to bargain and avoid a strike, but time is running out if the ILA is unwilling to return to the table."

In a separate news release on Sept. 25, the ILA said its 85,000 members will continue to honor its century-plus pledge to handle all military cargo, even if there is a coastwide strike beginning Tuesday, Oct. 1, 2024.

"Dating back to World War 1, the ILA was always proud to note that 'ILA Also Means Love America' when it came to its 'No Strike Pledge' in handling U.S. military cargo at all its ports," said ILA President Harold Daggett, who served in the U.S. Navy and saw combat duty during the Vietnam War. "We continue our pledge to never let our brave American troops down for their valour and service and we will proudly continue to work all military shipments beyond Oct. 1st, even if we are engaged in a strike."

ILA President Daggett also noted that ILA Longshore workers will continue to work Passenger Cruise vessels at all ILA ports, to "not inconvenience" the tens of thousands of Americans who have booked trips in advance.

"We understand that many families plan and pay for cruises vacations on passenger ships more than a year out, and we don't want them to be disappointed or inconvenienced in any way." said President Daggett. "For almost three years during the worst of the pandemic, the cruise ship industry was shut down, and our ILA rank-and-file members handling passenger cruise vessels lost a lot of manhours."

BIDEN ADMISTRATION WEIGHS IN

According to the Journal of Commerce, "The head of the USMX met with Biden administration officials at the White House Sept. 27, 2024, sources said, as the administration reached out to maritime employers along the East and Gulf coasts just days before what would be the first coastwide longshore work stoppage since 1977.

"During a longshore negotiating cycle, the White House has generally followed a familiar script in coaxing and then pressuring longshore labor and employers to reach a deal, according to one source involved in past bargaining on behalf of employers. The Labor Department first tells both sides it will be monitoring negotiations. If following attempts to break a deadlock fail, the White House can threaten to call leaders from both sides to Washington."

However, a quick end to the strike would be for President Biden to invoke the Taft-Hartley Act. The Taft-Hartley Act is a 1947 U.S. federal law that extended and modified the 1935 Wagner Act. In short, it prohibits certain union practices, such as a strike. In October 2002, President George Bush invoked the Taft-Hartley act, ending an 11-day lockout at West Coast Ports.

The Retail Industry Leaders Association (RILA) said in a press release on their website, "Retailers are increasingly concerned about the negative impacts a strike at U.S. East and Gulf coast ports will have on supply chains and the broader economy. With the clock quickly winding down, RILA is urging the Biden-Harris administration to quickly intervene and ensure both parties reach an agreement.

"The ripple effects of a strike -- port congestion, vessel delays and missed shipments, increased shipping costs, inventory challenges, and more -- all amount to yet another round of supply chain disruption and uncertainty. Given the current contract expiration date has been on the calendar for years, retailers view this strike and its imminent disruption as a self-inflicted wound to the U.S. economy. It is unfortunate that talks were seemingly stalled to prepare for a strike rather than to continue forward and find a solution. And although retailers have already activated contingency plans to help mitigate its effects, the longer a work stoppage goes on, the harder it will be to do so."

JOC added, "Biden, who has prided himself as the most pro-union president in modern times, has shown a willingness to avert transport labor disruption. In late September 2022, he stepped in during the final hours before union rail workers were set to launch a nationwide strike, less than two months before key mid-term elections, and brokered a tentative deal that was eventually approved by rank-and-file."

ILA UPDATE SEPT. 29

This is a Facebook post on the ILA account page at noon on Sept. 29: "With 36 hours to go before the end of the ILA-USMX contract tomorrow evening, the 85,000 members of the International Longshoremen's Association, joined in solidarity by tens of thousands of dockworkers and maritime workers around the world, will hit the picket lines at 12:01 a.m. on Tuesday, Oct. 1, 2024, and strike at all Atlantic and Gulf coast ports from Maine to Texas."

The post added, "USMX refuses to address a half-century of wage subjugation where Ocean Carriers profits skyrocketed from millions to mega-billion dollars, while ILA longshore wages remained flat.

"ILA unity remains strong and is growing. The ILA will update the public and media on any new developments on Sept. 30 by 11 a.m. The ILA is not engaging in one-on-one interviews either day. We have no information to release about locations of pickets or protests beginning at 12:01 a.m. on Tuesday, Oct. 1, 2024."

Link to the letter from RILA and over 170 organizations representing a broad coalition of industries, as well as a nearly 70 U.S. House lawmakers calling on the White House to engage: https://rilastagemedia.blob.core.windows.net/…

More on negotiations: https://ilaunion.org/…

Mary Kennedy can be reached at Mary.Kennedy@dtn.com

Follow her on social platform X @MaryCKenn

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