The American dockworkers’ union ILA and the USMX have still not reached an agreement – and none is in sight.
If the dispute is not resolved by next Monday, 45,000 dockworkers will go on strike. Ports on the East and Gulf coasts of the US could be closed. The union’s first strike since 1977 would have an impact on global shipping. Experts expect a shake-up in the supply chain.
So far, contract negotiations between the International Longshoremen’s Association(ILA) and the United States Maritime Alliance (USMX), which represents employers in the ports, have failed completely. The contract between the two parties expires on Monday. It applies to six of the ten busiest US ports.
ILA demands wage increases of 70%
“The ILA will definitely take to the streets on 1 October,” said Harold Daggett, president of the union. It is demanding wage increases of over 70% and commitments from terminal operators not to automate their facilities in order to safeguard jobs.
“We are on the right side of history,” said ILA Vice President Dennis Daggett, pointing to the achievements of the union and the dockworkers. During the pandemic, they “didn’t take a day off” and ensured that supply chains held up. “Now we need the public’s help.”
The USMX had repeatedly stated that there were no signs of an agreement. They are hoping for a word from the White House, but the Democratic administration has said it is not prepared to intervene. Industry analysts fear a “profound impact” on the market, which could affect supply chains and lead to far-reaching delays.
Some ports and terminals along the US East and Gulf coasts have announced that they will have extended opening hours in the coming week. During this time, there is expected to be a scramble for available trucking resources to keep the flow of goods moving. The ports pointed out that a closure means they cannot guarantee conditions for refrigerated cargo stuck at the ports.
Shipping companies respond to strike warning
As Sea-Intelligence reports, shipping companies are already responding to the threat of strike action by the ILA. THE Alliance (THEA) has announced that it will be skipping a number of ports on the east coast of the USA in the coming week. Disruption surcharges have also been announced. Although it is possible to divert some ships to Canadian ports such as Halifax or Montreal, they will not be able to handle dozens of additional ships. The Danish shipping company Maersk also warned weeks ago that supply chains would be disrupted.
The 14 ports controlled by the ILA handled 28.4 million TEU of container freight in 2023, or almost 550,000 TEU per week. According to Linerlytica, every week the ILA is on strike would block 1.7% of the global container fleet. An indefinite strike would probably even affect 4.5 million TEU of the fleet – 15% of global capacity.
The last major comparable work stoppage was an 11-day lockout at West Coast ports in 2002, which cost US$1bn per day and caused a six-month backlog.
