As the deadline looms for contract negotiations between the International Longshoremen’s Association (ILA) and the United States Maritime Alliance (USMX), tensions are mounting, and the possibility of a port strike on the US East and Gulf coasts is becoming increasingly likely. Recent statements by ILA President Harold Daggett have underscored the union’s firm stance against automation and its determination to secure better terms for its members, setting the stage for a potential labor showdown that could significantly impact supply chains and shipping activities across the region.
In a letter addressed to union members, Mr. Daggett, alongside his son Dennis Daggett, the ILA’s Executive Vice President, condemned a recent USMX press release as “propaganda.” They criticized what they perceive as corporate greed on the part of USMX members, claiming that inflation has sharply reduced workers’ wages while USMX continues to profit.
The union has particularly taken issue with the USMX’s approach to automation, despite the alliance’s pledge to maintain the current contract language, which stipulates that no fully automated terminals or semi-automated equipment will be implemented without mutual agreement.
The Daggetts also voiced concerns about new equipment investments that, according to them, should have been agreed upon beforehand with the unions. Additionally, they highlighted several other points of contention, such as the inadequacy of current healthcare provisions, opposition to the installation of cameras in workstations—which they view as an issue of control rather than safety—and the continuous disputes over pension plans.
Their letter concluded with a rallying cry for solidarity among union members: “Stay strong, stay united, and we will prevail!”
The escalating rhetoric from the ILA leadership has raised alarm across the shipping and logistics industry. Stephanie Loomis, head of ocean freight for the Americas at Rhenus, expressed concerns on social media, pointing out that all indicators are moving towards a strike on the East and Gulf coasts. According to her, the wage increase demands of around 78% are unlikely to be accepted by carriers, and the union’s rigid position on automation could be seen as a step back from previous agreements.
Politics will undoubtedly play a critical role in this unfolding drama. Loomis speculated that USMX may have proposed a deal similar to the one reached by the International Longshore and Warehouse Union (ILWU) on the West Coast, which included a 32% wage increase and a $2 billion bonus for union members.
She noted that, given Daggett’s strong language and tactics, he may feel compelled to secure a landmark deal for the union as part of his legacy. This stance has far-reaching implications, suggesting that a potential strike could be prolonged.
In the meantime, shippers are looking to the Biden administration for potential intervention. However, the proximity of the US presidential election complicates the likelihood and timing of any government action. While the administration has previously shown willingness to mediate in labor disputes—such as during the rail strike threats in 2022—the ILA leadership has made it clear they prefer to negotiate independently without government interference.
This leaves the Taft-Hartley Act as the president’s only viable option, but invoking it would carry significant political ramifications given the current election dynamics, and in the video attached, Daggett disregards the effectiveness of a return to work order.
The Retail Industry Leaders Association (RILA) has warned of the severe consequences of a port strike. The timing could not be worse, coinciding with peak shipping season and the influx of goods ahead of China’s Golden Week holiday. Each day of a work stoppage could result in up to five days of backlogs, a scenario that would disrupt supply chains and impact businesses nationwide. Both labor and management have much to lose, making a mutually beneficial agreement imperative.
For Edward J. Zarach & Associates, the focus remains on minimizing disruption for our clients and maintaining fluid supply chains during these uncertain times. As the situation evolves, we are committed to providing timely updates and working closely with our partners to develop contingency plans.
Now more than ever, strategic planning and proactive measures are essential for businesses dependent on East and Gulf Coast ports. Contact us today to discuss how we can support your logistics needs and help you navigate these challenging circumstances.