October 1 ------ With just hours left on their prior six-year contract, the International Longshoremen’s Association stepped up its rhetoric for the strike it has been planning for a year or more. After pressure from the Biden administration and trade groups, word leaked out late on Monday that there had been contact between the sides raising a final glimmer of hope for progress. The employers represented by the U.S. Maritime Alliance (USMX) are reported to have raised their offer leading to some talk between the sides.
The ILA’s stance according to The Wall Street Journal was that it would not begin negotiations until the employers agree to a 77 percent increase in wages for the new six-year contract. The master contract will also have to tackle issues regarding automation at the ports, benefits, and work rules. The employers represented by the U.S. Maritime Alliance (USMX) were believed to be standing at an offer of approximately a 40 percent wage increase and maintaining the prior rules regarding automation. A leaked internal memorandum from USMX appears to show the offer was increased to "nearly 50 percent" but USMX asked for an extension to complete the deal.
Union President Harold Daggett earlier in the day say blame for the strike lies with the USMX while the employers had repeatedly said they were ready to start negotiations. The union says USMX “refuses to address a half-century of wage subjugation,” while citing the profits made by carriers, especially during the surge in shipping during and after the pandemic. “The ocean carriers represented by USMX want to enjoy rich billion-dollar profits that they are making in 2024, while they offer ILA longshore workers an unacceptable wage package that we reject,” the ILA said in its final statement before the strike. “ILA longshore workers deserve to be compensated for the important work they do keeping American commerce moving and growing.”
The ILA shut down refusing media interviews on Monday. It also declined to provide details on when and where the picketing would begin only saying that members would walk off at 12:01 am on October 1. It will be the first coastwide strike since 1977.
As late as Friday in an update to customers, Maersk said it was mostly still accepting bookings as normal. The exceptions include bookings for refrigerated containers outbound from inland locations via the U.S. Atlantic and Gulf Coast. Analysts have said imports and exports of perishables would be the first to feel the impact of the strike. They speak of shortages of items such as bananas and cherries initially.
As the strike goes on, the analysts point to an impact on raw materials and industrial goods, vehicles, and later consumer goods. Some items such as imported alcohol, wine, and beer, would likely first be impacted and later broader lines of consumer goods. The expectation is that retailers have stockpiled inventories ahead of the anticipated strike but some importers are already talking of flying goods at higher cost likely to be passed on to the consumer. The expectation is that carriers will initially anchor vessels. Companies such as Ocean Network Express (ONE) and Maersk have said they would anchor their ships and review their status daily. The ILA has promised not to stop military cargo and passenger shipping. Tankers and bulkers use different terminals not covered under the ILA contract.
Analysts vary on the cost of the strike to the U.S. economy. CNN cites a Michigan-based research firm Anderson Economic Group saying the direct costs of a one-week strike could be about $2.1 billion. Analysts at JP Morgan and Jefferies have set the total cost to the economy in a range of $3 to $4.5 billion a day. Some estimates are as high as $5 billion per day.
The Biden administration's position continues to be that it is a collective bargaining issue and that it would not invoke its power to impose a cooling-off period or mediation. After speaking with both sides last week, reports are the administration was encouraging the employers to improve their offers over the weekend while publicly calling for resuming talks and a quick resolution.
Source: maritime-executive.com
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