Union workers at U.S. East Coast ports officially on strike

The International Longshoremen’s Association (ILA) shut down all ports from Maine to Texas at 12:01a.m. Oct. 1, as ILA rank-and-file members began setting up picket lines at waterfront facilities up and down the Atlantic and Gulf Coasts.

The ILA rejected United States Maritime Alliance (USMX) final proposal made on Monday, setting the stage for the first ILA coast wide strike in almost 50 years.

ILA said in a statement that USMX’s last offer fell far short of what union members are demanding in wages and protections against automation.

ILA released a statement Sept. 30 saying the USMX was blocking the path toward a settlement on a new master contract by refusing the union’s demands for a new contract.

 “ILA longshore workers deserve to be compensated for the important work they do keeping American commerce moving and growing,” the ILA said in a release. “It’s disgraceful that most of these foreign-owned shipping companies are engaged in a ‘Make and Take’ operation: They want to make their billion-dollar profits at United States ports, and off the backs of American ILA longshore workers, and take those earnings out of this country and into the pockets of foreign conglomerates. Meanwhile, ILA dedicated longshore workers continue to be crippled by inflation due to USMX’s unfair wage packages.

USMX also released an update on negotiations Monday evening saying it and ILA had traded counter offers related to wages.

“The USMX increased our offer and has also requested an extension of the current master contract, now that both sides have moved off their previous positions. We are hopeful that this could allow us to fully resume collective bargaining around the other outstanding issues – in an effort to reach an agreement,” USMX said in the release. “Our offer would increase wages by nearly 50 per cent, triple employer contributions to employee retirement plans, strengthen our health care options and retain the current language around automation and semi-automation.”

ILA added that it believes shippers are gouging customers, resulting in increased costs to American consumers.

“They are now charging $30,000 for a full container, a whopping increase from $6,000 per container just a few weeks ago,” the union said. “In just a short time, they went from $6,000, to $18,000, then $24,000 and now $30,000. It’s unheard of and they are doubling their $30,000 fee stuffing the same container from multiple shippers. They are killing the customers.”

Inside Logistics reported earlier in the month how a strike at U.S. East Coast ports would impact Canadian ports, with Frank Kenney, director of industry solutions at Cleo, an end-to-end supply chain integration software company, saying it would significantly increase traffic through the Port of Halifax and Port of Montreal due to their proximity to rail carriers.

“This makes them ideal for inbound and outbound freight. However, the challenge lies in moving goods in and out of Halifax, which often involves rail transportation through the Midwest of the United States, with Chicago as a major hub,” said Kenney. “Berthing at Port Newark in New York offers easier access to East Coast highways and rail systems, but Chicago lies 960 miles to the west, adding at least a day to move freight from there to key hubs in the east. The bottleneck is likely to occur at Port Huron, Mich. This combination of factors—added transit days, double border crossings, maritime operations in Halifax and rail in Huron—will not be optimal.

Kenney said he also expects maritime activity to surge during a port strike, as manufacturers and retailers look to stock up on goods ahead of a work stoppage and the Holiday season.

“The lingering volatility of the rail worker situation in Canada and the current U.S. election could also contribute to increased demand,” he said. “Depending on the diligence of retailers, we’ll feel the increase in costs but likely not the impact on merchandise availability.”

Everstream Analytics also tracked how the strike would impact national supply chains.

Everstream said port workers would limit or partially halt port operations through restricting overtime work and engaging in spontaneous walkouts. While the effects would be less damaging than a full-scale strike, longer vessel queues and wait times will likely lead to increased congestion at affected ports, according to Everstream.

Everstream said a full-scale strike will have an immediate impact on cargo movements by increasing congestion on East and Gulf coast ports but also causing heavy diversions to U.S. West Coast ports or Canada.

“U.S. West Coast ports [will] almost certainly see an increase in congestion from the increase in diverted cargo flow. U.S. East and Gulf coast ports combined account for roughly 50 per cent of imported cargo, and West Coast capacity [will] quickly become inundated with the increased volume. This may lead to disruptions such as longer vessel waiting times, congestion in container storage yards and delays in rail operations in and out of affected ports,” said Jena Santoro, senior manager of global risk intelligence, Everstream Analytics. “In addition, the threat of work stoppages on the U.S. West Coast in solidarity cannot be ruled out. The International Longshore and Warehouse Union (ILWU) has pledged its backing to its East and Gulf Coast counterpart. While the ILWU has not outlined any specific actions it plans to take in support, solidarity strikes of any kind could prompt nationwide port disruptions and severe impacts on maritime trade with the U.S.

“Counts for waiting vessels at North American ports have steadily increased to the highest numbers recorded for this year. This is likely due to early diversions by shippers who are interested in preemptively avoiding disruptions from the looming strikes.”