Fears of Maine to Texas port strike grow

ILA president Harold Daggett: “We are preparing to strike at all ports from Maine to Texas come October 1, 2024, if a new agreement is not reached.”

Inbound cargo volume at America’s major container ports could see a near-record surge this month as retailers bring in merchandise ahead of a potential port strike at East Coast and Gulf Coast ports this fall, according to the Global Port Tracker report released this month by the National Retail Federation and Hackett Associates.

“Retailers are concerned by the possibility of a strike at ports on the East and Gulf coasts because contract talks have stalled,” NRF vice president for supply chain and customs policy Jonathan Gold said. “Many retailers have taken precautions including earlier shipping and shifting cargo to West Coast ports.

“We hope to see both sides resolve this issue before the current contract expires because retailers and the economy cannot afford to see a prolonged strike.

“This comes on top of ongoing disruption issues including the attacks on commercial vessels in the Red Sea. Vessel diversions have led to increased shipping times and costs and have led to equipment shortages and congestion in Asian ports.”

The contract between the International Longshoremen’s Association and the United States Maritime Alliance (USMX) covering East Coast and Gulf Coast ports is set to expire on September 30. Negotiations have broken down and the ILA has threatened to strike if a new contract is not reached by then. NRF has continued to urge the parties to return to the table to continue negotiations. Rising freight rates have also prompted importers to ship earlier.

ILA PREPARES FOR STRIKE

In his most recent public comment on the possibilities of an East and Gulf Coast port strike, made on August 8, Harold J. Daggett, international president of the 85,000-member International Longshoremen’s Association said that the union continues to work round the clock, eager to engage in serious negotiations with United States Maritime Alliance (USMX), while also preparing for a possible strike on October 1, 2024.

“We are preparing our ILA membership for both possibilities,” said Daggett. “We will stand strong to win a new contract that adequately compensates our hard-working and dedicated ILA longshore workforce, and simultaneously are preparing to strike at all ports from Maine to Texas come October 1, 2024, if a new agreement is not reached.”

“Our employers know in their hearts that the ILA longshore workers deserve a great contract,” said Daggett. “The cannot nickel and dime us, while posting billion-dollar profits. That’s just not fair and we are ready to fight for a great contract.”

The ILA has called for Wage Scale Meetings September 4 and 5, 2024, in New Jersey where the union’s Wage Scale delegates will review its Master Contract demands. They will also use those meetings to establish strike committees from Maine to Texas to be ready for October 1, 2024.

“The clock is ticking, and we are getting closer and closer to October 1,” said Daggett. “There will be no extensions offered to USMX so their time is running out.”

USMX: READY TO CONTINUE BARGAINING

“We are proud of our record of nearly half a century of successfully negotiating new Master Contracts with the ILA without a strike,” said USMX in an August 9 update on the contract negotiations. “USMX has made several offers since we first began substantive contract discussions in 2022. Our latest proposal would provide industry-leading wage increases, boost employer retirement contributions, offer new employees higher starting wages, raise employer contributions to local benefits, and continue to provide premier health care coverage. It also retains the existing technology language that created a framework for how to modernize and improve efficiency while protecting jobs and hours – a priority for our members and the ILA.

“We have been clear that we are ready to continue bargaining and work toward an agreement that recognizes our workers’ contributions and creates a sustainable future for both parties.”

STRIKE WOULD CREATE MAJOR BACKLOG

Copenhagen-headquartered maritime supply chain data and analysis specialist Sea-Intelligence warns that the strike would create a major buildup of containers.

“Using historical data, we estimate U.S. East Coast handling volumes of 2.3 million TEU in October, which translates into 74,000 TEU per day, split 36,000 on imports and 38,000 on exports,” says Sea-Intelligence. For empties alone, a strike would mean the inability to load 20,000 TEU each day.

“Once a potential strike is over, this buildup of containers would have to be handled on top of the normal flow. The capacity with which to clear this backlog, equals the excess capacity available in the port systems on the East Coast. Excess capacity in this context is the ability of the port to handle volumes, above what is actually handled. One way to estimate this excess capacity, is to look at the maximum containers ever handled on the East Coast versus the expected handling in October 2024. We estimate that the port system in October would have an ability to increase port handling by 13% compared to the expected 2.3 million TEU.”

A Sea-intelligence graphic shows the time it would take to clear out the backlog of 74,000 TEU created from one day of strike, at different levels of excess capacity.

“As we estimate the East Coast ports to have 13% excess capacity over the expected normal flow of 2.3 million TEU in October, then it would take six days to clear the backlog from one day of strike,” says Sea-Intelligence. “If the ports have just a little more excess capacity available, this would more realistically bring this figure down to 4-5 days. However, this means that a one-week strike in the beginning of October, would not be cleared until mid-November. If we get a two-week strike, then realistically, the ports would not be back to normal operations until we are into 2025.”