Longshoremen at key US ports threatening to strike over automation and pay

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In an attempt to thwart the automation of their jobs, about 45,000 port workers along the U.S. East and Gulf Coasts have threatened to strike on Oct. 1, a move that would shut down ports that handle about half of the nation’s ship-borne cargo.

The International Dockers Union is demanding a significant wage increase and a complete ban on the automation of cranes, gates and container handling systems used to load or unload cargo at 36 U.S. ports. When and how the dispute is resolved, it is likely to affect how goods move in and out of the United States for years to come.

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If the strike is resolved within a few weeks, consumers probably won’t notice any major shortages of consumer goods. But a strike that lasts more than a month is likely to cause shortages of some consumer products, even though most holiday consumer goods have already arrived from overseas.

A prolonged strike would certainly hurt the U.S. economy. Even a short one could cause disruptions. Traffic is likely to increase at key points across the country as shipments are diverted to West Coast ports, where workers belong to a different union that is not involved in the strike. Once the dockworkers union eventually returns to work, a backlog of ships is likely. Experts say each day of a strike at the ports takes four to six days to resolve.

“I think everyone is a little nervous about this,” said Mia Ginter, director of North American ocean freight at C.H. Robinson Logistics. “The rhetoric this time with the ILA has reached a level we’ve never seen before.”

The UAW and the Maritime Federation of the United States, which represents the ports, have not met to negotiate since June, when the union announced it was suspending national talks to finalize local port agreements first. No date has been set for further talks on national contracts.

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Harold Daggett, the union’s president, warned earlier this month that dock workers were ready to strike once their contracts expired on September 30.

“We are so far apart,” Daggett said. “Trust me, we will close on October 1 if we don’t get the wages we deserve.”

Top-level dockworkers now earn a base wage of $39 an hour, or just over $81,000 a year. But with overtime and other benefits, some can earn more than $200,000 a year. The union and the ports would not discuss wage levels. But a 2019-2020 report from the Waterfront Commission, which oversees the Port of New York, said about a third of dockworkers stationed there earn $200,000 or more.

But Daggett claims that the higher-paid dockworkers work up to 100 hours a week, much of it overtime, and sacrifice a lot of their family time in doing so.

The Maritime Alliance said it was committed to resuming talks and avoiding the first national port workers’ strike since 1977. The alliance accused the union of pre-determining the strike.

“We need to sit down and negotiate a new agreement that avoids an unnecessary and costly strike that would be harmful to both sides,” the coalition said in a statement.

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In the event of a short-term strike, industry experts say consumers likely won’t notice shortages in stores during the holiday shopping season. Most retailers have moved goods ahead of the usual holiday shipping season and are already stocked in warehouses.

Imports to ports are up 10% this year compared to 2023 on the East Coast and 20% on the West Coast, suggesting some cargo was shipped in anticipation of the strike, said Ben Nolan, a transportation analyst at Stifel.

Nolan noted that the dockworkers union has some leverage ahead of the presidential election, with memories still fresh of the crowded ports and clogged supply chains that followed the pandemic-induced recession. Unions have also drawn support this year from political candidates courting workers’ votes.

“If there was ever a time when workers could get what they want, it’s now,” Nolan said.

If the strike extends beyond a month or so, shortages of goods could arise. Some manufacturers could experience shortages of parts, especially in the auto and pharmaceutical industries, which generally do not stock large inventories of parts. Exports of cars and other goods that travel through the East Coast could also be affected.

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Analysts say the union’s initial demands included a 77 percent wage increase over a six-year contract. Daggett, the union president, said big wage increases would offset the high inflation of the past few years. He said union members expect their biggest battle — against automation of port jobs — to come in the distant future.

“We do not believe that robots should replace human work,” he said.

In the massive port of Rotterdam, one of the world’s most automated, union workers have demanded early retirement packages and reduced working hours as a way to preserve jobs. Ultimately, automation has not caused significant job losses, according to a researcher at Erasmus University in the Netherlands. However, he predicts that automation could cut port jobs by 25% in the future.

U.S. ports lag behind their counterparts in Asia and Europe in their use of automation. Analysts point out that most U.S. ports take longer to unload container ships than ports in Asia and Europe, and suggest that without more automation, they could become less competitive. Shippers may send more goods to Mexican or Canadian ports and then to the United States by rail or truck, said Eleftherios Ikovou, associate director of supply chain resilience at Texas A&M University.

Meanwhile, analysts say West Coast ports may be able to pick up some of the extra cargo that might be diverted from eastern ports, particularly from Asia, in the event of a strike. But they won’t be able to handle all of it. Nor will the U.S. rail network.

“The East Coast has seen tremendous growth, and there’s no way around it,” Nolan said.

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