It’s possible that I shall make an ass of myself. But in that case one can always get out of it with a little dialectic. I have, of course, so worded my proposition as to be right either way (K.Marx, Letter to F.Engels on the Indian Mutiny)
Wednesday, October 02, 2024
ILA Goes On Strike for the First Time Since 1977
ILA protestors in June 2024 showing support for union leadership (ILA)
The International Longshore Association has launched its first strike in nearly 50 years. After months of warnings, the group's 45,000 members began a walkout at midnight Eastern Time, shutting down operations at 36 ports from Texas to Maine. The ILA cast the shutdown in existential terms, warning that terminal operators would cut jobs and introduce more automation if the union didn't prevent it.
“The ILA is fighting for respect, appreciation and fairness in a world in which corporations are dead set on replacing hard-working people with automation,” the ILA said in a flyer distributed to its picketers. “Robots do not pay taxes and they do not spend money in their communities.”
After pressure from the Biden administration and trade groups, word leaked out late on Monday that there had been contact between the sides raising a final glimmer of hope for progress. The employers represented by the U.S. Maritime Alliance (USMX) are reported to have raised their offer, leading to some talk between the sides - but not enough to stave off a strike.
The ILA’s stance, according to The Wall Street Journal was that it would not begin negotiations until the employers agree to a 77 percent increase in wages for the new six-year contract. The master contract will also have to tackle issues regarding automation at the ports, benefits, and work rules. The employers represented by the U.S. Maritime Alliance (USMX) were believed to be standing at an offer of an approximately 40 percent wage increase and maintaining the prior rules regarding automation.
A leaked internal memorandum from USMX appears to show the offer was increased to "nearly 50 percent" but USMX asked for an extension to complete the deal.
Union President Harold Daggett said that blame for the strike lies with the USMX, while the employers had repeatedly said they were ready to start negotiations. The union says USMX “refuses to address a half-century of wage subjugation,” while citing the profits made by carriers, especially during the surge in shipping during and after the pandemic.
“The ocean carriers represented by USMX want to enjoy rich billion-dollar profits that they are making in 2024, while they offer ILA longshore workers an unacceptable wage package that we reject,” the ILA said in its final statement before the strike. “ILA longshore workers deserve to be compensated for the important work they do keeping American commerce moving and growing.”
The ILA refused media interviews on Monday. It also declined to provide details on when and where the picketing would begin only saying that members would walk off at 12:01 am on October 1.
As late as Friday in an update to customers, Maersk said it was mostly still accepting bookings as normal. The exceptions include bookings for refrigerated containers outbound from inland locations via the U.S. Atlantic and Gulf Coast. Analysts have said imports and exports of perishables would be the first to feel the impact of the strike, potentially leading to shortages of items like bananas and cherries initially.
As the strike goes on, analysts point to an impact on raw materials and industrial goods, vehicles, and later consumer goods. Some items such as imported alcohol, wine, and beer would likely first be impacted and later broader lines of consumer goods. The expectation is that retailers have stockpiled inventories ahead of the anticipated strike but some importers are already talking of flying goods at higher cost, which is likely to be passed on to the consumer.
The expectation is that carriers will initially anchor vessels. Companies such as Ocean Network Express (ONE) and Maersk have said they would anchor their ships and review their status daily. The ILA has promised not to stop military cargo and passenger shipping. Tankers and bulkers use different terminals not covered under the ILA contract.
Analysts vary on the cost of the strike to the U.S. economy. CNN cites a Michigan-based research firm, Anderson Economic Group, saying the direct costs of a one-week strike could be about $2.1 billion. Analysts at JP Morgan and Jefferies have set the total cost to the economy in the range of $3 to $4.5 billion a day. Some estimates are as high as $5 billion per day.
The Biden administration's position continues to be that it is a collective bargaining issue and that it would not invoke its power to impose a cooling-off period or mediation. After speaking with both sides last week, reports are the administration was encouraging the employers to improve their offers over the weekend while publicly calling for resuming talks and a quick resolution.
ILA Declares “Ports Are Ours” as Leaders Threaten Strike “Will Cripple You"
ILA members hit the picket lines at 12:01 a.m. on October 1 (ILA)
The leadership and rank-and-file membership of the International Longshoremen’s Association were fired up in the first hours of their first coastwide strike in nearly 50 years. An estimated 25,000 or more members hit the picket lines from Maine to Texas as carriers and shippers scrambled with their contingency plans and President Joe Biden put out a statement in support of the union calling for a quick resolution.
The ILA in its official statement said it rejected U.S. Maritime Alliance’s final proposal made on Monday, which USMX said called for a nearly 50 percent wage increase. “The USMX last offer fell far short of what ILA rank-and-file members are demanding in wages and protections against automation,” the union declared in its statement.
Union President Harold Daggett put out a video threatening to “cripple you,” lecturing on the nature of port operations. He said it is time for the carriers and their terminal companies to share their massive profits made during the pandemic with the dockworkers. He is demanding the companies “compensate the American LIA longshore workers who perform the labor that brings them their wealth.”
“We are prepared to fight as long as necessary to stay out on strike for whatever period of time it takes, to get the wages and protections against automation our ILA members deserve,” said Daggett.
Government officials sought to downplay the short-term impact saying that businesses were well stocked and prepared for the strike. They said there should be little immediate impact on consumers while others such as The Conference Board issued more dire warnings that the strike would “paralyze U.S. trade.”
Port officials varied but the executive director of the Port Authority of New York and New Jersey said nearly 100,000 containers are waiting to be offloaded in the NY/NJ port area. He said 35 ships had been scheduled to arrive in the coming week.
Broad support is being voiced for the strikers. The Teamsters union which represents drivers among others highlighted its support while reminding members “Teamsters do not cross picket lines.”
President Joe Biden issued a statement reiterating his belief in collective bargaining. He said he had urged USMX to “come to the table,” and to present a fair offer to ensure dockworkers are paid appropriately. He also said they would be monitoring the situation including looking for any price gouging activity that benefits foreign ocean carriers.
“It’s only fair that workers, who put themselves at risk during the pandemic to keep ports open, see a meaningful increase in their wages as well,” said Biden highlighting the record profits of the foreign-owned carriers. “Now is not the time for ocean carriers to refuse to negotiate a fair wage for these essential workers while raking in record profits.”
Harold Daggett doing interviews at the start of the strike (ILA)
Daggett speaking on CNN however praised Acting Labor Secretary Julie Su saying she had “knocked down doors” and was trying to settle the contract dispute. He said she was trying to get fair negotiations.
While the administration is vowing not to act, expectations are that the pressures will mount if the strike drags on. Daggett said they would choke off vehicle deliveries, raw materials for construction, and other supply chains resulting in layoffs in other industries. He asserts people do not know what a strike is today.
“We expect the strike itself to last for five to seven days until a government intervention... but the ripple effect is likely to be felt across the whole networks into Europe, into Asia for at least into January, February," said Peter Sand, chief analyst at Xeneta.
Maersk issued an advisory last night telling customers that they should hold on to empty containers until the strike was over. They said Maersk did not have arrangements for empty storage space and advised customers to speak with the representatives about shipping alternates. More carriers have also announced additional fees. CMA CGM immediately invoked Force Majeure imposing fees on refer boxes and truck chassis but suspending D&D charges and extending free time.
USMX representing the employers responded Tuesday afternoon saying its last offer of a nearly 50 percent wage increase "demonstrated a commitment to doing our part to end the completely avoidable ILA strike." It said it was "looking forward to hearing from the union about how we can return to the table and actually bargain, which is the only way to reach a resolution.”
Cranes stand still as US dockworkers fight for ‘future’
Shipping containers are stacked as dockworkers are on strike in Port Newark on October 1, 2024 in New Jersey - Copyright AFP Bryan R. SMITH
Elodie MAZEI
Just a short drive from the New York skyline, giant cranes, containers, and machiney stand motionless behind closed gates.
The International Longshoremen’s Association (ILA), 85,000 members strong, has launched its first strike since 1977 after weeks of deadlocked negotiations over a six-year labor agreement.
“It’s not just money, it’s our future,” declared Herbert Hall, a 76-year-old vice president of the dockworkers’ union.
Speaking from a picket line outside the APM terminal in Elizabeth, New Jersey, he raises his voice over blaring music and honking traffic.
“We’re talking about machines, artificial intelligence, and all that stuff. We want job security.”
The port, like dozens along the East Coast and Gulf of Mexico, has ground to a halt.
Around 400 strikers have gathered, some lounging in camping chairs, sipping coffee, and enjoying free burgers from a food truck.
Union logos adorn their jackets and T-shirts, while picket signs voice their concerns: “Machines don’t feed families,” “Profit over people is unacceptable,” “Automation harms families.”
Jonita Carter, a docker for 23 years with the Maher company, emphasizes their dedication: “We worked during COVID, we never stopped. We moved the world.”
“If it’s zero degrees, I’m outside. If it’s 40 degrees, I’m outside. We don’t ask for much. We’re asking for a small portion, which we rightly deserve.”
– ‘Not playing fair’ –
The strikers’ main priorities are better wages and guarantees against automation.
While some protections were included in the recently expired labor agreement, and the United States Maritime Alliance (USMX) — representing port employers — has pledged to renew them, union members find these insufficient.
“We want better protections,” insisted Hall, citing developments at the port of Mobile, Alabama, which strikers feel violate previous commitments.
Joe Losada, 57, agreed: “They’re not playing fair. These are generational jobs… We have to keep these jobs and protect them.”
His daughter represents the fourth generation of his family to work at the port.
Family ties are common among port workers. Carter joined through her godfather, and her niece followed suit.
“Most people here have family ties,” she noted.
“I want my colleagues to be able to pay for their children’s university, I want to have good health insurance. But everything is increasing, everything is automated.”
Despite USMX announcing resumed talks and offering a 50 percent pay rise, the ILA rejected it.
Losada explains, “on the face of it, it looks good, but we haven’t had a raise in a while… and when you factor in 30 percent inflation, they’re only offering us 20 percent.”
As the strike continues, workers remain resolute.
“Nobody wants a long strike… but we need what we need,” said Losada.
Carter echoes his sentiment: “I’m ready. We’re going to stay together.”
White House Meets with Terminal Operators Ahead of Looming ILA Strike
Administration officials met with employers calling for negotiations to resume for the dockworkers contact (White House official photo)
Going into the final weekend before the threatened strike that would stop container and RoRo operations at 36 U.S. ports, the White House summoned representatives of the terminal operators and employers to a meeting. In the official readout on the meeting, the White House said that it had a similar conversation with the leaders of the International Longshoremen’s Association during the week.
The official report said that the meeting was headed up by Transportation Secretary Pete Buttigieg, Acting Labor Secretary Julie Su, and top White House economic adviser Lael Brainard. They were reported to be meeting with the U.S. Maritime Alliance officials although it did not specify which executives were representing the organization. USMX’s membership consists of container carriers, terminal operators, and port associations.
The meeting comes as the employers and union remain at a deadlock and have not had formal negotiating sessions for the master contract that covers approximately 45,000 longshore workers at ports from Maine to Florida and along the U.S. Gulf Coast. USMX acknowledged earlier in the week that it had received outreach from the federal government while saying the ILA continued to refuse to resume negotiations. USMX failed an “unfair labor” notice seeking the government to compel the ILA leadership to negotiate.
In the war of words being played out in statements, the leadership of the ILA said there had been contact between the sides but called the wage proposals from the employers “unacceptable.” They said the employers were unfair in the low wage offer. Automation issues are not being mentioned but are reported to be a major element of the new contract with the ILA saying it rejects all automation or semi-automation as a job killer.
White House officials confirmed today’s meeting as well as the messages with the ILA without providing any details. They said they were conveying directly "that they need to be at the table and negotiating in good faith fairly and quickly."
Unidentified individuals from the Biden administration previously said they had not moved in the nearly four years of the presidency to break a union strike and it was not their intent now. They believe disputes need to be settled by negotiation, but also are closely looking at the current situation and the ramifications for the supply chain and the economy. Last year, Jule Su was credited as being instrumental in driving the contract agreement between the West Coast employers represented by the Pacific Maritime Association and the International Longshore and Warehouse Union.
Analysts point out that the White House has few options especially just weeks before the presidential elections. Trade organizations and elected officials are all pressuring the administration to intervene. It could invoke the Taft-Hartley Act which would mandate a cooling off period and negotiations. Short of that, its only option is outreach and cajoling the two sides back to the negotiating table.
The six-year contract is ticking down due to expire at midnight on September 30 with the ILA saying it will not extend past the deadline. The union has been preparing for a long time for what its leadership has called “the biggest battle the ILA has faced in 47 years.” The last strike was in 1977 and lasted 44 days.
Global Schedule Reliability Remained Stable in 2024 Ahead of U.S. Strike
Schedule reliability stabilized in 2024 ahead of the U.S. port strike (file photo)
Carrier schedule reliability stabilized in 2024 after the shocks coming from the Red Sea diversions and issues at the Panama Canal. By pressing extra vessels into operation and management carriers were able to level off after significant drops from 2023 but that is before the anticipated impacts of the strike at U.S. East/Gulf Coast ports starting at midnight tonight, September 30.
“Schedule reliability in 2024 has stabilized within the 50 to 55 percent range,” highlights Alan Murphy, CEO of Sea-Intelligence. “While disappointingly low, the minimal volatility this year does give shippers a relatively good idea of what to expect month to month.”
In August 2024, global schedule reliability improved by just 0.7 percentage points month over month up to 52.8 percent. It was the smallest percentage movement of 2024 but it is down over 10 percentage points from a year ago. The average year-to-date for 2024 is just over 53 percent versus a 62 percent average for 2023.
Carriers had to manage the diversions from the Red Sea went caused schedule reliability to plunge to just over half of all vessels in January 2024 versus over 62 percent in November 2023. Now they face a similar challenge that could tie up numerous vessels along the U.S. eastern seaboard as the International Longshoremen’s Association plans to stake its strike tonight at more than 30 ports. Atlantic trades have limited options for diversions with carriers reporting they plan to initially anchor vessels.
In August, congestion backlogs also remained stable. The average delay for late vessels according to Sea-Intelligence remained at just over five and a quarter days in August largely unchanged over four months. The industry however recovered from delays well over six days in January 2024. However, it is still far below the 4.7 days reported in August 2023.
The current average delay for late vessel arrivals Murphy notes was “only surpassed by the pandemic highs of 2021-2022.” This number however will increase dramatically in October if vessels continue to wait offshore for a strike resolution.
The performance is also significantly off from the industry’s goals. Maersk was the most reliable top-13 carrier in August 2024 with schedule reliability of 54.7 percent, followed by Hapag-Lloyd with 54.3 percent. The two carriers however continue to reiterate their goal for the new network to be established with the Gemini Cooperation is for schedule reliability above 90 percent.
During August, Maersk’s schedule reliability was largely unchanged while Hapag showed a better than 5 percentage point improvement. Many of the top carriers (COSCO, HMM, ONE, OOCL, Yang Ming) all had strong month-over-month improvements. However, four carriers including MSC Mediterranean Shipping Company showed declines in August with PIL, Wan Hai, and Zim each showing the largest declines month over month.
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