Unions Turn up Heat on East/Gulf Coast Port Labor Contract

Washington, D.C. (June 18, 2024): “The threat of a coast-wide strike on October 1, 2024, is becoming more likely as U.S. Maritime Alliance (USMX) and its member companies continue to drag their feet,” warned International Longshoremen’s Association (ILA) President Harold Daggett

This ominous message from the ILA was included in an ILA Press Release last week highlighting the record profits of shipping companies and union concerns over automation as they negotiate a new Master Contract for ports from Maine to Texas that seeks greater distribution of shipping revenues to dock workers.

Technological advances have led to increased efficiencies via automated tracking of cargo and increased use of technology to perform clerical tasks. Both advancements are good for shipping but a threat to Union jobs.  In addition, Unions are upset that the tech support jobs created by automation are not union jobs and they should be since work is performed around the ports.

The ILA walked away from the negotiating table on June 10 over an automation issue at the Port of Mobile. Union leaders do not believe the USMX is negotiating in good faith as shippers and ports explore ways to circumvent the Union’s traditional roles, including using technological solutions to perform basic clerical tasks that eliminate Union jobs.

SFIA responded to this development with a letter to President Biden and key cabinet secretaries asking for the government to intervene to ensure fragile supply chains are not artificially disrupted by a labor strike at ports from Maine to Texas. The resiliency of supply chains has been tested recently by Red Sea hostilities, the Ukraine war, S. China Sea tensions, and the recent drought in the Panama Canal; an East Cost Port Labor strike as we move into the peak shipping season would present a huge challenge to supply chains and lead to diversion of cargo to West Coast ports.

The Unions point out that A.P. Moeller-Maersk had $82 billion in revenue in FY 2022, a 50 percent increase over FY 2021. Similarly, Mediterranean Shipping Company had revenues of $28.2 Billion, COSCO saw revenues jump from $51.67 billion in FY 21 to $63.2 billion in FY 2022 and APM Terminals saw a nine percent growth in revenues to $4.4 billion in FY 22. All these companies’ interests are represented by USMX on behalf of the ports.

The current ILA contract with East and Gulf Coast Ports expires on September 30th, five weeks from Election Day. Labor is driving a hard bargain, but East and Gulf Coast Port unions use a compensation formula that includes the volume of cargo moved through their port. A strike would have a direct impact on Union wages which will put pressure on Union leadership to reach a new labor agreement. If talks drag on and a strike looks more imminent, expect the Administration to step in to avoid a supply chain crisis so close to the Election but there are no guarantees with Unions playing hardball in sharing shipper and port finances.

For more information, please contact Bill Sells, SFIA SVP for Government & Public Affairs, at [email protected]

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