A port strike at the US East and Gulf ports that could lead to delays and disrupt supply chains began on October 1 after the International Longshoremen's Association (ILA) and the United States Maritime Alliance (USMX) failed to move forward with a new deal.
At the stroke of midnight on Tuesday, the ILA launched the first coastwide strike in the ILA in nearly a half-century, with union members setting up picket lines at all the major ports on the Atlantic and Gulf Coasts.
The ILA said in a statement that they intend for the demonstrations to continue round the clock, 24/7, for as long as it takes for USMX to meet their demands.
Union members are demanding a US$5 an hour wage increase for each of the six years of a new ILA-USMX Master Contract and what they describe as "absolute airtight language that there will be no automation or semi-automation."
The USMX — which represents employers of the East and Gulf Coast longshore industry — said separately that in the last 24 hours, leading to October 1, the USMX and ILA have 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," they said. "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."
"Our offer would increase wages by nearly 50%, triple employer contributions to employee retirement plans, strengthen our health care options, and retain the current language around automation and semi-automation," USMX added.
US President Joe Biden earlier indicated that the federal government would not intervene to stop industrial action by invoking the Taft-Hartley Act, a federal law that allows presidential intervention in labour disputes that create a national emergency.
JP Morgan analysts estimate that the port strike could cost the US economy somewhere around US$5 billion a day.
The ILA announced on September 30 that a widespread strike on the East Coast and Gulf of Mexico will commence at 12:01 a.m. on Tuesday, October 1, 2024.
The labour action would involve 85,000 union members and impact 36 ports from Maine to Texas, the ILA said.
"The United States Maritime Alliance refuses to address a half-century of wage subjugation," the union said in a Facebook update on Sunday.
"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 added in a separate post.
The current Master Contract began on October 1, 2018, and will continue until September 30, 2024.
For months, the ILA has threatened to close the 36 ports it covers if employers such as container ship operator Maersk and its APM Terminals North America do not provide significant wage increases and halt terminal automation projects.
USMX said on September 23 that "despite additional attempts by USMX to engage with the ILA and resume bargaining, [it] has been unable to schedule a meeting to continue negotiations on a new Master Contract."
"We remain prepared to bargain at any time, but both sides must come to the table if we are going to reach a deal, and there is no indication that the ILA is interested in negotiating at this time," USMX added.
"Our goal remains the same — we want to bargain and avoid a strike, but time is running out if the ILA is unwilling to return to the table."
USMX filed an 'unfair labour practice' charge against the ILA on September 25, 2024.
"Due to the ILA's repeated refusal to come to the table and bargain on a new Master Contract, USMX filed an Unfair Labor Practice (ULP) charge with the National Labor Relations Board (NLRB) and requested immediate injunctive relief – requiring the Union to resume bargaining – so that we can negotiate a deal," USMX said on September 26, its latest website update.
ILA called the action a "weak publicity campaign" against the union.
US East, Gulf ports prepare for strike
Meanwhile, as a deal appears nowhere in sight, ports on the East and Gulf Coast are preparing to stop work at their container terminals.
Port of New York and New Jersey (PANYNJ) said it has been actively preparing for the possible event of a strike at the port, which is the largest on the eastern seaboard.
"The Port Authority has been working closely with the commercial trucking industry to ensure cargo containing essential goods, medical supplies, and food products that have already been offloaded are moved out of Port facilities and to their final destinations," New York Governor Kathy Hochul said.
"We do not anticipate that Upstate ports, including Albany, Coeymans, Oswego and Buffalo, will be impacted by a strike," she added.
On September 23, the port noted that export cargo will not be accepted at any of the terminals unless it can be loaded onto a vessel before September 30.
"We expect heavy congestion toward the end of the week and on Monday, September 30, as parties seek to remove containers from the terminal prior to the potential shutdown, so we recommend picking up your containers as early as possible."
The Port of Houston is also preparing for a potential work stoppage on October 1. "If there is a work stoppage, Port Houston container terminal gates will be closed," the statement said.
The port's ingate would close at 6:00 p.m. on September 30, and reefer acceptance would end at 5:00 p.m., with vessel operations concluding at 7:00 p.m. "ILA-supported public general cargo/multi-purpose facilities are expected to be impacted by the work stoppage."
Georgia Ports also unveiled its contingency plans for the possible work stoppage but noted that "if there is a work stoppage, GPA marine terminals will be closed."
The potential work stoppage is said to impact the ports handling more than 40% of total containerized goods entering the country. It also comes at a particularly challenging time for ocean supply chains, which have already faced significant disruptions in 2024 due to conflicts in the Red Sea, drought in the Panama Canal, and the Baltimore bridge collapse.
HSBC's Global Freight Monitor earlier noted that US Gulf and East Coast ports accounted for 57% of US imports and 8% of global container trade in 2023.
Major container lines such as CMA CGM, Hapag-Lloyd, Maersk, and MSC have already announced labour disruption surcharges.
US business leaders earlier noted "deep concern" about the potential strike at the East Coast and Gulf Coast ports, warning that the work stoppage at some of the country's major ports could cost the US economy billions of dollars daily.
The ILA had previously stated that the strike would not impact military cargo shipments or cruise ship traffic. This is the first coast-wide ILA strike since 1977.
