By Peter Eavis
In a significant development, longshoremen on the East and Gulf coasts initiated a strike on Tuesday, marking the first such action in nearly half a century, which will impede trade through several of the busiest ports in the U.S. and potentially impact the economy negatively.
Members of the International Longshoremen’s Association, representing approximately 45,000 workers, commenced picketing after last-minute negotiations failed to prevent a work interruption.
“Nothing is going to move without our involvement — nothing,” declared Harold J. Daggett, union president, to picketers outside a port terminal in Elizabeth, New Jersey, in a video shared on a union Facebook page early Tuesday.
The United States Maritime Alliance, which represents port employers, opted not to comment early on Tuesday. The two parties could not reach an agreement on wage increases, and disputes over the implementation of new technology in the ports created friction for the union.
“We believe they’re offering significantly lower pay than we deserve,” asserted Leonard Riley, a longshoreman at the Port of Charleston in South Carolina, on Tuesday. “We will not return until we receive an acceptable offer.”
Businesses are now faced with a period of unpredictability. Trade analysts suggest that a brief strike would cause minimal long-term effects, but a prolonged stoppage could result in shortages, increased prices, and potentially layoffs.
“When discussing a two- to three-week strike,” J. Bruce Chan, a transportation analyst at Stifel, a Wall Street firm, mentioned, “that’s when the situation starts to escalate in severity.”
The potential for major economic repercussions from a strike places President Joe Biden in a challenging position just five weeks ahead of national elections. Prior to the strike, he indicated he would refrain from using federal labor laws to terminate a port shutdown, a move made by President George W. Bush in 2002; however, some labor experts argued that he might reconsider this if the strike began to adversely affect the economy. White House officials had been urging both parties to finalize an agreement before the strike commenced.
Longshoremen are responsible for transferring containers off ships, sorting them, and loading them onto trucks or trains, as well as managing bulk cargo. Approximately 60% of the nation’s container shipments pass through the East and Gulf coast ports, including the Port of New York and New Jersey, the third busiest in the U.S., along with rapidly expanding ports in Virginia, Georgia, and Texas.
A strike will also halt the transportation of automobiles and heavy machinery through the Port of Baltimore, where operations had already been limited for much of the spring following a collision involving a container ship and the Francis Scott Key Bridge.
Automakers reported that they are keeping an eye on the strike but stated it is premature to assess the impact.
Cruise ship activities remain unaffected by the strike, and military shipments will continue to operate. Rick Cotton, director of the Port Authority of New York and New Jersey, announced on Monday that around 100,000 containers would be held at the port during the strike, and that 35 ships expected in the coming week would have to anchor offshore.
“The stakes are extremely high,” remarked Governor Kathy Hochul of New York during a press briefing on Monday. “The chances of significant disruption are considerable.” However, she also reassured consumers, indicating that shortages in food and pharmaceutical supplies are not anticipated.
For the efficient movement of substantial quantities of goods in and out of the nation, there are no viable alternatives to ports. Ports cannot function without longshoremen, thus providing them with considerable bargaining power in labor discussions.
West Coast ports remain operational. Longshoremen there are affiliated with a different union and successfully negotiated a new contract last year, which includes substantial wage increases.
Under the contract that lapsed on Monday, longshoremen on the East and Gulf coasts received a peak pay rate of $39 per hour. The ILA is seeking a $5 hourly raise for each of the six years of a new agreement, totaling a 77% increase over the contract’s duration.
The parties had minimal communication for several months prior to the strike. Yet in recent days, the Maritime Alliance claimed on Monday that it had “exchanged counteroffers concerning wages” with the ILA and proposed extending the existing contract. The alliance also stated that their latest offer to the union would result in a “nearly 50%” pay increase over the contract’s life.
In a statement released Tuesday morning, the ILA criticized the alliance’s proposal as “grossly inadequate” in meeting the demands of its workforce.
With overtime and shift differentials, numerous longshoremen earn well above $100,000 annually, surpassing many other workers lacking a college degree. However, they argue that their hours are significantly higher than those of workers in other fields earning similar salaries, and they frequently work in challenging or hazardous conditions.
The high inflation experienced in recent years has eroded the purchasing power of their wages. Longshoremen argue that they deserve a share of the increased profits that their employers—some of which are major global shipping companies—realized during the trade boom of 2021 and 2022.
“They want to reap their billion-dollar profits at U.S. ports, exploiting American ILA longshore workers, and diverting those earnings out of this country,” stated Daggett, the union president, in a Monday statement.
Recognizing the potential for a strike, numerous companies expedited shipments of merchandise before Tuesday, including a majority of durable consumer goods intended for the holiday shopping season. However, even a brief strike could impact importers dealing in perishable items such as fruit.
