August 13, 2024
Source: Labor Notes
Image by Jaxport
Union negotiations covering longshore workers on the East and Gulf Coasts have been stalled since June 10, bringing the union closer to a potential strike at the September 30 contract expiration.
Leaders of the International Longshoremen’s Association have called a September 4-5 delegates meeting to discuss demands and strike strategy. Last week the union sent the employer association, known as USMX, a strike notice that federal law requires 60 days before a strike.
The contract between the ILA and the USMX is one of the largest expiring this year, and a strike would have massive economic impact—billions of dollars per day.
Negotiations broke down in June over union allegations that the port of Mobile, Alabama, as well as other unnamed ports, had automated some processing of trucks entering and leaving the docks—work traditionally done by ILA members.
Union leadership and the USMX have not held public negotiations since.
Image by Jaxport
Union negotiations covering longshore workers on the East and Gulf Coasts have been stalled since June 10, bringing the union closer to a potential strike at the September 30 contract expiration.
Leaders of the International Longshoremen’s Association have called a September 4-5 delegates meeting to discuss demands and strike strategy. Last week the union sent the employer association, known as USMX, a strike notice that federal law requires 60 days before a strike.
The contract between the ILA and the USMX is one of the largest expiring this year, and a strike would have massive economic impact—billions of dollars per day.
Negotiations broke down in June over union allegations that the port of Mobile, Alabama, as well as other unnamed ports, had automated some processing of trucks entering and leaving the docks—work traditionally done by ILA members.
Union leadership and the USMX have not held public negotiations since.
STATE OF THE INDUSTRY
The ILA represents longshore workers on the East and Gulf Coasts and the Great Lakes, while the International Longshore and Warehouse Union (ILWU) represents longshore workers on the West Coast, and in Hawaii, Alaska, and Canada.
ILA President Harold Daggett is one of the highest-paid union leaders in the U.S.; last year through multiple salaries he made $900,000. Other ILA leaders also collect multiple salaries; among them is Daggett’s son, the executive vice president, who made $700,000 last year.
While the ports of Los Angeles and Long Beach on the West Coast are the nation’s largest by container volume, the next five busiest are on the East Coast and covered by the ILA/USMX agreement: New York/New Jersey, Savannah, Houston, Virginia, and Charleston.
Shipping traffic regularly gets rerouted between coasts for a variety of reasons, including the fear of labor disputes. During the 13 months of negotiations leading up to the ILWU’s contract settlement last year, employers were so uneasy that some took the “safer” route of sending cargo to East Coast ports that weren’t under threat of strikes or slowdowns.
Container data shows that shippers have begun to shift cargo west ahead of this year’s contract expiration. Shippers have also started moving up shipments for the holiday season ahead of the contract expiration, which could lead to August being one of the busiest months in recent years.
Two other factors affect global shipping: the ongoing drought at the Panama Canal, which is limiting how many ships that can pass through, and attacks by Houthi rebels in Yemen, which have led many ships to take a longer route to avoid the conflict.
Nonetheless, companies that rely on ILA labor have done extremely well since the pandemic hit. Maersk, the world’s biggest shipping company, reported $9.8 billion in profits in 2023. An ILA report shows many USMX member companies made significantly higher revenues in 2022 than in 2021, and 2020-2021 were already bonanza years for global shipping.
Now profits have receded slightly, but they’re still higher than in the years before the pandemic, and higher than the last time the ILA negotiated a contract.
WHAT’S AT STAKE
The issues in the 2024 negotiations are familiar: wages and benefits to help workers catch up to (and beat) inflation, and employer attempts to chip away at union work, especially the threat of automation.
The ILA leadership negotiates in a black box, with no transparency around demands and no regular bargaining updates to members. The ILWU took a similar approach in its 2022-23 negotiations, largely keeping quiet about developments at the bargaining table—a departure from the past—and releasing sporadic joint statements with the West Coast employers.
Even without much information from the ILA, though, we can piece together a picture of where things might be headed.
The ILWU’s six-year contract settled last year is one potential indicator. The Wall Street Journal reports: “Daggett is pushing for a much higher pay increase than the 32 percent raise over six years secured by West Coast dockworkers.”
ILA leadership released a statement August 11 citing widespread violations of the contract—the employers have been instituting automation—and saying “we are very far apart, particularly on economic issues. In fact, we are at an impasse.”
ILA workers make less than their West Coast counterparts, and have lower pension payouts than ILWU members, if they get them at all. Port workers in Houston and Philadelphia receive no pensions. NY/NJ workers receive around 55 percent of what ILWU members do, but still almost twice what Virginia ILA members are paid out. The ILWU has a single coast-wide pension.
THE AUTOMATION THREAT
Automation continues to threaten longshore jobs on both coasts. Employers have developed two automated terminals within the ports at L.A. and Long Beach. The foremen’s local of ILWU Canada could strike in Vancouver, B.C., in the coming weeks over an employer’s threat to introduce automation.
“Full automation” is a bit of a moving target. The “fully automated” Long Beach Container Terminal still has longshore workers fastening and unfastening containers on ships and operating the “hammerheads,” the giant ship-to-shore cranes that bring containers to land. But the work on the docks that was once done by dozens or hundreds of people, moving the containers around the yard, is now done by driverless trucks and wheeled cranes called “strad carriers,” used for moving and stacking containers.
East Coast ports have not yet seen the same attempts at full automation. The current ILA contract prohibits “fully-automated terminals and… fully-automated equipment” during the life of the contract, a provision the USMX may try to weaken.
Some automation is already present in ILA ports, however. Some rail-mounted gantry cranes can handle most of their range of motion autonomously, with operators only needed for the beginning and end of a container move. But the trucks, gates, and other types of cranes are still operated more manually.
In the port of Philadelphia, a newly built terminal includes some “hybrid” equipment, which can be operated manually or be automated. For now, operating that equipment remains ILA work.
Longshore unions are extremely aware of the threat new technology poses to their jobs. The introduction and adoption of shipping containers starting in the 1950s radically changed the industry, decimating the workforce. With freight packed into shipping containers, fewer workers were needed to move the same volume of goods.
The ILWU and the ILA negotiated those impacts in different ways. The ILWU’s main plan, achieved through its Mechanization and Modernization agreement (starting in 1960) and a long strike in 1971, was to defend the existing workforce. Workers whose jobs were eliminated through modernization efforts could take retirement payments early.
The ILA negotiated a “container royalty” fund in 1960, in which every ton of goods that comes through an ILA-represented port in a container is assessed a fee, which is then distributed to workers. ILA members continue to receive these payments—and the union collects dues off of them at a 10 percent rate, considerably higher than the 0.9 percent dues rate on wages.
SHOWDOWN LOOMING?
For now, the conflict is largely playing out in press releases and media coverage. Until the union walked away from negotiations, members were completely in the dark about demands and progress. The Journal of Commerce reports, citing industry sources, that the ILA is seeking a $5-per-hour increase for each year of the contract,.
ILWU ports regularly experience disruptions during negotiations. As the 2022-23 West Coast negotiations dragged on, employers accused the ILWU of orchestrating work slowdowns. However, the ILA doesn’t have the same culture and has not yet held any public rallies, much less unofficial slowdowns, to pressure the USMX ahead of the expiration. A serious contract campaign featuring actions like these is often a crucial ingredient in strike preparation.
The last East-Coast-wide strike was in 1977, lasting seven weeks. The last major walkoff was a one-day action in New York and New Jersey in 2016, a protest against actions by a government oversight body, the Waterfront Commission.
In 2012, the union extended the deadline for months before coming to an agreement. The most recent contract, in 2018, was resolved that June, far ahead of the September deadline.
This time, Daggett has stated that the union does not intend to extend the deadline past September 30. He also rejected the prospect of government mediation. Mediators were involved in the resolution of the ILWU contract last year.
For now, the conflict is largely playing out in press releases and media coverage. Until the union walked away from negotiations, members were completely in the dark about demands and progress. The Journal of Commerce reports, citing industry sources, that the ILA is seeking a $5-per-hour increase for each year of the contract,.
ILWU ports regularly experience disruptions during negotiations. As the 2022-23 West Coast negotiations dragged on, employers accused the ILWU of orchestrating work slowdowns. However, the ILA doesn’t have the same culture and has not yet held any public rallies, much less unofficial slowdowns, to pressure the USMX ahead of the expiration. A serious contract campaign featuring actions like these is often a crucial ingredient in strike preparation.
The last East-Coast-wide strike was in 1977, lasting seven weeks. The last major walkoff was a one-day action in New York and New Jersey in 2016, a protest against actions by a government oversight body, the Waterfront Commission.
In 2012, the union extended the deadline for months before coming to an agreement. The most recent contract, in 2018, was resolved that June, far ahead of the September deadline.
This time, Daggett has stated that the union does not intend to extend the deadline past September 30. He also rejected the prospect of government mediation. Mediators were involved in the resolution of the ILWU contract last year.
WILL BIDEN INTERVENE?
There will be significant political pressure to avoid a major, disruptive strike, especially so close to election day with inflation on voters’ minds.
This gives the union some leverage, because the federal government may pressure the USMX to settle; there will also be pressure on the union to settle, of course. It also suggests that the federal government would be more likely to step in, and more quickly.
The Taft-Hartley Act allows the federal government to seek an injunction in a labor dispute it considers a “national emergency,” forcing the parties back to work and into mediation
with federal oversight. This is the mechanism that George W. Bush used to end the 11-day West Coast port lockout in 2002. These injunctions can also be preemptive, before a walkout begins.
This is a different legal mechanism than the one under the Railway Labor Act that Congress and President Biden used to preemptively settle the rail negotiations in 2022. Also, the conditions aren’t exactly the same: rail unions then were actively working with the government to settle the dispute, and many workers had already voted to accept the terms. And what does a lame-duck president do with a major labor dispute?
Of all the workers in the hugely important logistics industry, longshore workers have some of the greatest potential economic leverage. On the East Coast, they’ve also got a union leadership that has a reputation for insularity and little followthrough on militant pronouncements. So what happens next is hard to predict. Many corporations are watching the dispute closely
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