For the first time in nearly 50 years, dockworkers on the East and Gulf Coasts went on strike Tuesday, a move that will cut off most trade through some of the busiest U.S. ports and could send a chill through the economy.
Members of the International Longshoremen’s Association union, or ILA, which represents roughly 45,000 workers, started setting up pickets after talks failed to avert a work stoppage.
“Nothing’s going to move without us — nothing,” Harold J. Daggett, the president of the union, told picketers outside a port terminal in Elizabeth, New Jersey, on Tuesday.
But in a sign that the union and the group representing port employers might be getting closer to a deal, Daggett told CNBC on Tuesday morning that the union was now seeking raises that added up to 61.5% over a six-year contract, down from the 77% the union had asked for earlier in negotiations.
The United States Maritime Alliance, the employers’ group, said Tuesday that its latest offer had included raises of nearly 50% and that it looked forward “to hearing from the union about how we can return to the table and actually bargain.” In addition to wage increases, the use of new technology in the ports has been a sticking point for the union.
On Tuesday morning, Daggett’s son, Dennis A. Daggett, who is an ILA executive vice president, was part of a large picket line outside a port terminal in Bayonne, New Jersey. He said that morale was “phenomenal,” and that the union was going to keep pushing for better wages.
“The raises we had in our previous contract — inflation really ate into them,” he said in an interview.
Businesses now face a period of uncertainty. Trade experts say that a short strike would cause little lasting damage but that a weekslong stoppage could lead to shortages, higher prices and even layoffs.
“When we talk about a two- to three-week strike,” said J. Bruce Chan, a transportation analyst at Stifel, a Wall Street firm, “that’s when the problem starts to get exponentially worse.”
The prospect of significant economic damage from a strike puts President Joe Biden in a quandary five weeks before national elections. Before the strike, he said he was not going to use a federal labor law, the 1947 Taft-Hartley Act, to force an end to a port shutdown — something President George W. Bush did in 2002. But some labor experts said he might use that power if the strike started to weigh on the economy.
Michael Vigneron, president of the ILA’s Atlantic Coast district, who was also at the Bayonne picket, said he hoped the president would not use the law. “We hope that we have this settled before that,” he said. “That’s the goal here — to get a contract.”
Longshoremen move containers off ships, sort them and put them on trucks or trains, and handle bulk cargo, too. Around three-fifths of the nation’s container shipments go through ports on the East and Gulf Coasts, including the Port of New York and New Jersey, the third busiest in the country, and fast-growing ports in Virginia, Georgia and Texas.
A strike will also stop the shipment of cars and heavy machinery through the Port of Baltimore, where operations were curtailed for most of the spring after a container ship crashed into the Francis Scott Key Bridge.
For bringing large amounts of goods in and out of the country, there is no practical alternative to ports. And ports cannot operate without the striking dockworkers, giving them strong leverage in labor negotiations.
West Coast ports are open. Workers there belong to a different union and agreed last year on a new contract that includes a significant increase in wages.
Under the contract that expired Monday, dockworkers on the East and Gulf Coasts earned a top rate of $39 an hour. The ILA had initially sought a $5-an-hour raise in each of the six years of a new agreement, which would add up to 77% over the life of the contract. The employers alliance had offered raises of $2.50 an hour every year earlier in negotiations.
Dennis Daggett of the ILA said focusing on the $39 top wage would be misleading because workers with less than six years of experience earned around half that sum per hour. He said the union was determined to secure higher wages for newer workers.
With overtime and shift work, many dockworkers earn well over $100,000 a year, putting them ahead of other workers without a college degree. But they say they have put in far more hours than workers in other jobs earning similar amounts, and do so in often harsh or dangerous conditions.
The high inflation of the last few years has reduced their wages’ purchasing power. And the workers contend that they have a right to a slice of the increased profits that their employers — some of which are large global shipping lines — made during the pandemic trade boom in 2021 and 2022.
Knowing that a strike was possible, many companies rushed in merchandise before Tuesday, including most of the durable consumer goods that they intend to sell during the holiday sales period. But even a short strike could hurt importers of perishable goods such as fruit.
Daniel J. Barabino, chief operating officer at Top Banana, a fruit distributor based at the Hunts Point Produce Market in the Bronx, New York, said a strike could cause him to run out of bananas, his main product, by the end of next week. “It’s going to be everyone in the region, all the banana importers — nobody’s going to have fruit,” he said.
Barabino added that shipping fruit by air was too costly. And he said he couldn’t make up the shortfall with sales of produce other than bananas. “They pay the coffee bill, maybe the bottled water bill,” he said, “but they’re not paying the electric bill, the rent, the truck leases or employee salaries.”
The ILA last walked out across all East and Gulf Coast ports in 1977, snarling container shipping for more than six weeks. The deal that ended the strike included wage raises well above those proposed by employers, increased contributions to pension plans and took steps to address the union’s concern that new technology could cause job losses.
The union is still fighting automation. It broke off talks with the maritime alliance in June, saying a port in Mobile, Alabama, was checking trucks using technology that was not authorized under its labor contract. (The technology had been in use since the port opened in 2008, a source familiar with its operations said.)
Under the expired contract, port operators were permitted to use “semiautomated” technology but not equipment “devoid of human interaction.” The alliance said it had offered in recent talks to carry that commitment into a new contract.
On Tuesday, Dennis Daggett was standing outside the most automated terminal in New Jersey, Port Liberty Bayonne, operated by CMA CGM, a large shipping company based in Marseille, France. He said the nonautomated container cranes in the Port of New York and New Jersey could be more productive than the semiautomated equipment in Port Liberty. CMA CGM did not respond to a request for comment.
This article originally appeared in The New York Times.
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