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Labor Issues Loom Over East Coast Ports

February 8, 2024 Kevin Baxter

Port New York

East Coast ports (and Gulf Coast ports) in the U.S. and the labor union representing their workers face a contract set to expire this fall with the very real threat of a strike looming. While West Coast ports reached agreement last year on a new long-term contract, the possibility of a strike led some to divert traffic to the east coast - and the Gulf Coast. That very same threat in 2024 already has some shifting back. So how real is a strike possibility?

Will East Coast Ports Go on Strike in 2024?

Due to the coming contract expiration and a number of potential sticking points between the International Longshoremen's Association (ILA), which represents dockworkers, and the United States Maritime Alliance (USMX), representing employers - the prospect of a strike in 2024 is very real. In fact, ILA President Harold Daggett at a November meeting said “members should prepare for the possibility of a coastwide strike in October 2024.” And unlike on the west coast, where the two sides went almost a year their previous contract ended without a work stoppage while negotiations continued, Daggett has indicated the September 30 contract expiration date is hard and fast for the ILA.

What Are the Key Issues Between the Union and the Ports?

The most pressing issue appears to be pay raises, but there are other key issues between the union and ports as well, including benefits, hard limits on the use of automation, and contract language requiring workers at any new terminals be union as well. To the last point, the ILA actually has an active $300 million lawsuit against USMX, Hapag-Lloyd and OOCL regarding a hybrid labor model which also uses state workers at the Leatherman Terminal in Charleston. That litigation is pending a Supreme Court review.

The union has said it wants a "generous" or "landmark" contract package, with many speculating a raise of 30% or more plus bonuses - on par with the West Coast deal - is part of it. The two sides held negotiations multiple times last year, with no agreements reached after those talks. Daggett has encouraged early talks at the local level so that any location-specific issues are ironed out to avoid any delays affecting the master agreement.

Last month, the National Retail Federation (NRF) weighed in, urging the parties to return to the table to hammer out an agreement. NRF President & CEO Matthew Shay in a letter to both sides, indicated growing concern in the industry of potential disruptions, and asked that negotiations resume "as soon as possible" to pave the way for an agreement. For their part, the ILA and USMX have remained relatively quiet publicly in recent times, with no official updates on the talks released by either side.

Which Ports Would Be Affected By a Strike?

Contract talks apply to about 45,000 ILA members at East Coast and Gulf Coast ports. Service at 36 coastal ports from Maine to Texas would be affected if a strike were to take place, including three of the five busiest ports in the U.S. Those are the Port of New York and New Jersey, the Port of Savannah and Port Houston. These ports have all seen increased activity due to issues on the West Coast, but they could quickly see that volume shift away the longer labor uncertainty persists.

When Was the Last Port Strike?

The last port strike affecting East Coast and Gulf Coast ports occurred in 1977 - a labor action that lasted nearly two months. Since then, USMX and ILA have successfully negotiated 10 new contracts without any widespread work stoppage. The current six-year master contract was signed in September of 2018.

Whether your goods are coming in through ports on the east coast, gulf coast, west coast or no coast, we can help with your shipments once they hit dry land. Contact us and we'll go over intermodal and truckload options that fit your business best. For more information about InTek, or logistics and supply chain issues in general, check out our Freight Guides.

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