Dockworkers begin strike, snarling East and Gulf Coast ports : NPR

BALTIMORE — Union dockworkers along East Coast and Gulf Coast ports began walking picket lines early Tuesday, halting the movement of billions of dollars’ worth of goods including furniture, paper, shoes, manufacturing components, farm machinery and much more.

The pickets began just after midnight, after talks between the International Longshoremen’s Association (ILA) and the United States Maritime Alliance (USMX), which represents ocean carriers and port operators, failed to yield a new contract.

“USMX brought on this strike when they decided to hold firm to foreign owned Ocean Carriers earning billion-dollar profits at United States ports, but not compensate the American ILA longshore workers who perform the labor that brings them their wealth,” ILA President Harold Daggett said in a statement released early Tuesday.

The two sides have not met face-to-face since June. They appear to be far apart on key issues. The alliance asked for an extension Monday, a request that went unanswered by the union.

Despite pressure from House Republicans and more than 170 industry groups, who warned that a strike will have a devastating impact on the economy, the Biden administration is standing firm in its decision to let the collective bargaining process play out.

“I don’t believe in Taft-Hartley,” President Biden told reporters on Sunday, citing the federal law that allows the President to call for an 80-day cooling off period when the nation’s safety is at risk.

Billions of dollars’ worth of goods in limbo

How big an economic impact the strike will have depends on how long it lasts.

The strike affects work at 14 ports along the East and Gulf Coasts, according to the U.S. Maritime Alliance. They are the Ports of Boston, New York/New Jersey, Philadelphia, Baltimore, Norfolk, Wilmington, Charleston, Savannah, Jacksonville, Miami, Tampa, Mobile, New Orleans and Houston.

More than $2 billion worth of goods typically flow through these ports daily, from cars and clothing to bourbon and bananas.

That includes more than half of all cargo containers coming into the U.S., or about a million containers a month. It also includes more than three-quarters of the containers carrying exports out — about 327,000 per month — according to the freight-tracking company Vizion.

Those volumes dropped sharply in recent days in anticipation of the strike.

“If it goes on for weeks, it’s going to be a massive headache,” said Vizion CEO Kyle Henderson. “If it’s just days, it’s probably just a blip.”

Trade groups warned in a letter to President Biden that an extended strike would have dire consequences for the U.S. economy.

“It is imperative that the parties return to the table without engaging in disruptive activities that could harm the economy and the millions of businesses, workers and consumers who rely on the seamless flow of goods, both imports and exports, through our East Coast and Gulf Coast ports,” the groups’ letter said.

The Distilled Spirits Council of the United States notes more than three-quarters of imported liquor typically flows through the affected ports, along with more than 40% of the American spirits sold overseas. Halting those shipments could be particularly costly in the run-up to the Christmas shopping season.

“Consumers love to buy your favorite bottle of American whiskey or scotch or Irish whiskey or cognac as holiday gifts,” says Chris Swonger, the council’s CEO. “Even a day’s strike could have repercussions along the line.”

Companies seek alternate routes

Companies have made contingency plans to blunt some of the economic impact.

Ryan Petersen, CEO of Flexport, a freight forwarding company, says customers already have diverted cargo to the West Coast in anticipation of the work stoppage.

“Really starting at the beginning of the year, it became very clear that this was going to be a major issue,” says Petersen.

In recent days, he says, Flexport’s focus has been on getting cargo out, so as not to incur hefty fees for containers left at East and Gulf Coast ports, and shoring up operations at West Coast ports in anticipation of a surge of activity.

Goods that are already on ships headed to ports affected by the strike will just have to sit offshore until the strike is over, Petersen says.

“The reality is, there’s only so much you can do,” says Jeff Sloan of the American Chemistry Council, whose members rely heavily on ports along the Gulf Coast and in New Jersey and New York. “For large volume materials like plastic resins, there’s just no way to feasibly divert that to other ports or to ship it in some other way.”

Far apart on wages

Two major sticking points are wages and automation.

In a statement Monday, the U.S. Maritime Alliance says the two sides had traded counteroffers on wages in the past 24 hours.

The alliance said its latest offer would increase wages by nearly 50% and triple contributions to employee retirement plans.

The International Longshoremen’s Association had rejected earlier offers, calling them “stingy,” given the shipping industry’s massive profits in recent years.

“Even a $5.00 an hour increase in wages for each year of a six-year agreement only amounts to an average annual increase of approximately 9.98 percent,” union president Daggett said in a statement last week.

Wage increases under the last contract, signed in 2018, were far more modest, with only $1-an-hour increases in four of the six years, bringing the top hourly wage to $39.

Jobs at the ports have traditionally been among the best-paying blue-collar jobs in the country, often topping $100,000 a year. But Daggett says the port operators should pay workers more.

“When they made their most money was during Covid, when my men had to go to work on those piers every single day,” he says in a video posted by the union. “They died out there with the virus. We all got sick with the virus. We kept them going.”

Fears about replacing humans with machines

On automation, Daggett has been warning dockworkers that the foreign companies that operate the ports are seeking to replace them with machines.

The U.S. Maritime Alliance has said it’s offered to keep the current ban on fully automated equipment and the requirement that any use of semi-automated equipment be negotiated.

Early Tuesday, Daggett responded in a statement saying the alliance’s latest offer “fell far short of what ILA rank-and-file members are demanding in wages and protections against automation.”

At ports around the world and even on the West Coast, advanced technology is already being used to move shipping containers.

Just how many jobs are lost in the transition to automated terminals isn’t entirely clear. The shipping industry, backed by researchers at UC Berkeley, argues that automation helps ports stay competitive and handle more goods, which in turn creates demand for highly skilled workers.

Tricky situation for the White House

The Biden administration says it’s encouraged all parties to keep negotiating and to do so in good faith.

On Friday, Transportation Secretary Pete Buttigieg and Acting Labor Secretary Julie Su met with the shipping companies’ representatives. They’d also “been in touch” with the dockworkers’ union throughout last week, according to the White House.

It’s clear the union has not been happy with Biden.

“Where’s the president of the United States? He’s not fighting for us,” Daggett said in the union video posted in September.

The sharp rebuke came nearly four years after Daggett endorsed Biden in the 2020 election, citing his friendship and support while criticizing former President Trump for filling courts with anti-union judges and supporting so-called right-to-work laws, aimed at weakening unions.

In July, shortly after the first assassination attempt on Trump, Daggett posted a photo of himself with Trump, offered prayers on behalf of the union membership, and recalled “a wonderful, productive 90-minute meeting” at Mar-a-Lago with Trump in November 2023.

“I expressed to President Trump the threat of automation to American workers,” he wrote. “President Trump promised to support the ILA in its opposition to automated terminals in the U.S. Mr. Trump also listened to my concerns about Federal ‘Right To Work’ laws.”

While Biden and Vice President Harris have the support of the leaders of most labor unions, the same is not true for many rank-and-file union members.

In 2022, freight rail workers were deeply angry with Biden for signing a measure that imposed a contract on them, blocking a nationwide rail strike.

Now with dockworkers on strike and the presidential election five weeks away, the administration likely does not want to risk major blowback from labor groups.