Dockworkers at Ports From Boston to Houston Halt Labor Talks
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The union representing dockworkers at East and Gulf Coast container ports has suspended labor contract negotiations set for June 11, citing a dispute over automation.
The breakdown comes less than four months before the current six-year pact between the International Longshoremen’s Association and the U.S. Maritime Alliance, representing ocean carriers and terminal operators, is set to expire on Sept. 30. The agreement covers about 45,000 dockworkers from Boston to Houston, including six of the 10 busiest US ports.
The impasse also arrives just as a fresh round of global shipping disruptions drives ocean freight rates to highs not seen since the pandemic.
Local agreements were in place at nearly all 14 ports covered under the ILA-USMX master contract when talks broke down at the Port of Mobile, Ala., late last week, according to a person familiar with the negotiations. The dispute stemmed from automated technology used by APM Terminals to process trucks, which the union says is a violation of the contract.
International Longshoremen’s Association (ILA) Halts Negotiations with United States Maritime Alliance (USMX) Amid Automation Disputes https://t.co/BPx3OCzBdx — The ILA App (@TheILAmobileApp) June 10, 2024
“There’s no point trying to negotiate a new agreement with USMX when one of its major companies continues to violate our current agreement with the sole aim of eliminating ILA jobs through automation,” ILA President Harold Daggett said in a statement. USMX declined to comment.
A spokesperson said A.P. Moeller-Maersk and APM Terminals, which is owned by the Danish carrier, remain in full compliance with the labor contract and will work with the ILA and other stakeholders to address concerns.
“We are disappointed that the ILA has chosen to make selected details of ongoing negotiations public in an effort to create additional leverage for their other demands,” the Maersk spokesperson said June 10.
Maersk ranks No. 5 on the Transport Topics Top 50 global freight companies list.
The ILA hasn’t had a coastwide strike since 1977, but reaching a new deal this summer will likely be difficult. Even without the automation dispute in Alabama, union and industry groups are far apart on wage increases.
The ILA is demanding wage gains to make up for inflation and a share of the extraordinary profits won by ocean liners during the pandemic. It’s asking for more than the 32% increase won by West Coast counterparts last summer, according to the person familiar with the talks.
The union said the automation issue must be resolved before the high-level talks on wages can proceed.
“With less than four months until the contract’s expiration, the ILA has very little faith that these issues will be addressed in time,” said the ILA statement.
The talks could also be a political headache for the White House, which stepped in last summer to help broker a deal when contract talks hit a wall on the West Coast. This contract expires just weeks before the presidential election, and, unlike ports in California and Washington state, container hubs from Houston to Charleston are in deep red states. The ILA on June 10 called on President Joe Biden to “recognize the threat posed by foreign-owned companies attempting to undermine American jobs.”
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The halt to negotiations is “very disappointing” and must resume as soon as possible, said Jessica Dankert, vice president of supply chain at the Retail Industry Leaders Association.
“Together, East and Gulf Coast gateways handle a majority of container traffic in the U.S., and supply chains can ill afford the uncertainty of potential disruption from labor actions — especially heading into peak shipping season for retailers,” she said June 10.
The risk of a major disruption will increase the longer negotiations go on and as each side gains leverage, said Koray Köse, chief industry officer at Everstream Analytics, a supply chain risk assessment firm. “It will become very hot if this is not settled rather quickly.”
The shipping industry, meanwhile, is under strain from a number of other issues, including attacks on vessels in the Red Sea, which have caused congestion and stretched capacity on other trade lanes, Köse said. Looming trade tariffs are also encouraging importers to deliver goods before global trade wars heat up. The ILA contract talks are likely to inflate container rates that are already on the rise as the summer goes on, he said.
Taking all those factors into consideration, plus the approaching U.S. election, Köse said, “you basically have the perfect storm for failure.”
