Strikes in U.S. East Coast and Gulf Coast ports

The tentative agreement represents a compromise on both sides. At the most critical point of contention over the size of the raise, labor and management reached a tentative agreement on a 61.5 percent wage increase for workers. This is higher than the 50% proposed by the USMA and lower than the 77% demanded by the ILA. The ILA, which had said that “if we force workers to return to work, people won’t take their jobs seriously,” agreed that 50,000 union members would return to work on Friday and be more productive. USMX, for its part, agreed to give workers a 61.5 percent raise over six years, increasing base hourly pay from $39 to $63. For workers, the whopping 61.5 percent increase is already higher than most labor contracts, and even higher than the contract that was agreed upon after the West Coast strike ended last year. In the meantime, the tentative agreement extends the old contract, which has expired, through January 15, 2025. Labor and management will continue to negotiate and finalize the salary increase before the expiration of the new contract. A person familiar with the matter told CNN that USMX agreed to a $4 raise on top of its current base pay of $39 per hour, an immediate raise of just over 10 percent. An additional $4 per hour raise over the course of the six-year tentative agreement would total a $24 per hour pay increase, a 61.5 percent increase. Union boss Harold Daggett said on Tuesday that the union was willing to consider a $4-an-hour increase before the strike, but he rejected his counterpart’s offer of $3 an hour after the strike began. The union opened negotiations with an offer of a 77 percent wage increase. ILA President Harold Daggett says the other side needs to make up for inflation and years of small pay raises. Members of the union make about $81,000 a year in base pay, but can earn more than $200,000 a year in overtime, according to AP news. At the same time, the union has emphasized its resistance to automation and its desire to ban it altogether. On Monday night, USMX said it had raised its wage offer to 50 percent and committed to keeping the restrictions on automation in the old contract, “which we hope will allow us to fully resume collective bargaining around other outstanding issues in an effort to reach an agreement.” However, in a statement early Tuesday, the union expressed its rejection of the latest USMX proposal out of a demand for automation restrictions that “falls far short of what rank-and-file ILA members are demanding in terms of wages and protections against automation.” President Daggett said in the statement, “We are prepared to fight if necessary and remain on strike for however long it takes to get the wages and protections against automation that ILA members deserve.” “They must now meet our demands to end this strike.”

After the agreement on wages, both labor and management want to get workers back to work as soon as possible. Even though there are still many terms to be considered and negotiated between the two sides for a new contract, the strike not only has a negative impact on many aspects of the national economy, logistics and supply chain, but is also detrimental to the workers themselves. According to AP news, workers in this strike have not been paid and received strike benefits from the union for the duration of the strike. A prolonged strike will affect the workers in terms of loss of income. That’s why it makes sense that this strike lasted only three days.

The trigger for the strike focused on two disputes, worker pay raises and port automation. In terms of worker pay raises, the strike is mainly due to the low pay of workers in the strike area compared to their counterparts. According to Reuters, part-time U.S. harbor workers earn $25,000 a year, while regular crane operators and supervisors earn up to $300,000 a year. The fact that the strike is taking place at eastern ports also correlates with their own low pay compared to their counterparts, with CBS News reporting that unionized workers at ports on the East Coast and Gulf Coast earn a base wage of $39 an hour, compared to their West Coast counterparts at $54.85. Chairman Daggett accused USMX of capitalizing on the booming shipping business when the American people were dependent on products from overseas during the New Crown Epidemic and “making billions of dollars and not wanting to share.” He argued that the union’s demand for a 77 percent pay increase was reasonable when combined with the profit level of the shipping industry, “and now we want them to pay it back. They will pay it back,” In terms of other benefits, Daggett asked USMX to increase health care, pension and annuity levels for port workers. On the issue of port automation, the ease with which U.S. port workers’ jobs can be replaced by automated equipment has led to a massive union rejection of automation. U.S. port workers, also known as stevedores, are primarily tasked with handling cargo on container ships, car carriers and cruise ships. From the job tasks we can easily find out that this is the position that is vulnerable to replacement by automated machinery and equipment. Automation takes away some workers’ jobs and further widens the pay gap between different types of work. As a result, ILA is very reluctant to automate advanced equipment represented by cranes, gates and container transportation. Chairman Daggett was the focal point of the strike as a worker opinion leader, but he was not well known prior to the strike. He took it upon himself to denounce USMX as a “representative capitalist group.” Daggett said the automated machines would “drive port jobs out of the United States”. At the same time, he accused USMX of often violating the terms of its old contract to bring in automated equipment. The Financial Times described Daggett as a “crusading hero” on behalf of “all the working-class Americans who fear losing their jobs to robots”. But there are many who question and criticize Daggett. Critics say he was determined to instigate a strike for the sake of his own performance and without regard for the greater good. During the strike, the United States was hit by Hurricane Helen. The strike at the ports severely blocked the transportation of relief supplies such as food and medicine, slowing down relief efforts in North Carolina and Georgia. In addition, he was embroiled in a dispute over his status as a “capitalist” and a “worker”. In 2005, a federal court charged him and other union officials with racketeering. Meanwhile, Daggett and his son were extremely well paid in the union, holding private yachts and Bentleys. Elon Musk, the famous American entrepreneur, has even stated as a result that Daggett owns more yachts than he does. Daggett’ s son, Dennis Daggett, matched his father in New York Harbor, stating that “shipping has always adapted to innovation, but we will never adapt to robots taking our jobs” , “Robots don’t pay taxes, don’t serve the community, and don’t spend money in the community. But guess who does? The International Longshoremen’s Association!” AP news reports that workers began a roundup of broomsticks at the Port of Philadelphia at midnight after the strike, circling the railroad crossing outside the port, chanting, “No fair contract, no job.” The union also posted message boards on the side of one of the trucks that read, “Automation Hurts Families: the ILA stands for Employment Protection.” Butler said workers need a fair contract that doesn’t allow their jobs to be automated, “It’s not something you start and stop.” “We are not weak,” he added, noting the importance of unions to the country’s economy in addition to pay and resistance to automation, union members are also pursuing their dignity as a working class in this strike. They emphasized to the community the sacrifices and contributions made by port workers, portraying themselves as victims of the international wave of technological progress and automation. The strike is a good platform for them to voice their demands for more benefits and conditions for themselves. “We worked day and night on the docks, we did our best, some of our members died from the virus” Many union members mentioned their dedication during the epidemic in interviews for the strike, showing that they were the driving force in keeping the U.S. economy and trade going” We’re not greedy, we’re just working people.”

As the employer in the labor dispute, USMX has also been more aggressive in this strike. In a Sept. 30 statement about having increased proposed wage increases to 50 percent, among other things, USMX directly pointed out that the two sides had not met face-to-face since June and that “the union has not negotiated in good faith.” Two days later, in a reversal of its status as an employer defendant, USMX filed charges against the ILA with the National Labor Relations Board, hoping that the Board would issue a directive requiring them to return to the bargaining table. In addition to its more aggressive, proactive charging behavior, USMX has taken more of a non-public operating behavior to avoid direct conflict with the union. Reports in the U.S. media indicate that the U.S. government has been in contact and communication with USMX. On the evening of September 30th, Biden urged USMX to make a better offer. The Associated Press reported that White House Chief of Staff Jeff Zients had asked USMX to make a suitable wage increase offer by the 3rd so that the strike would not exacerbate the effects of natural disasters such as Hurricane Helen. In a meeting with the USMX Board of Directors, National Economic Council Director Lael Brainard demanded “fair treatment” for port workers and made it clear that the President would not use his executive authority to end the strike. The Washington Post analyzed the action as being consistent with the Biden administration’s position of trying to depress the profits of shipping companies since the outbreak.

The massive port is an end-of-term test for Biden, “the most pro-union president in history.” The Taft-Hartley Act of 1947 provides the president with an 80-day cooling-off period to suspend strikes, granting him the power to intervene in strikes and severely restrict union behavior. CNN reports that the bill was also seen by the unions as one of the president’s weapons to strip them of their bargaining chips in labor negotiations. Despite having been urged by the U.S. Chamber of Commerce to intervene coercively, President Biden abandoned executive intervention by the federal government just prior to the strike, failing to follow the example of President George W. Bush, Jr. who used that authority to terminate an 11-day strike at West Coast ports in 2002. Biden’s waiver gives the unions leverage and room to fight, hoping that “all parties will come to the bargaining table and negotiate in good faith, fairly and expeditiously. ‘CNN reports that Liz Schuler, president of the American Federation of Labor-Congress of Industrial Organizations (AFL-CIO), mentioned in a letter that ’history tells us that employers do not negotiate in good faith when they are counting on the President to enact a strike ban.” The Institute of Development Studies at Fudan University summarized the Biden administration’s general approach to this negotiation as “generally facilitating a compromise between the two sides and an end to the strike, ostensibly supporting workers and unions, and privately strong-arming employers.” CNN reports that senior White House officials met with shipping industry owners on Zoom Thursday. Well-informed sources revealed Biden’s request to his chief of staff, the director of the National Economic Council, and the Secretary of Transportation to increase pressure to reopen the ports. The well-informed sources said that NEC Director Lael Brainard asked USMX to make a new offer in a virtual meeting. If the offer is higher, they can convince ILA to extend their contract. After the strike ended, President Biden praised the tentative wage agreement in a statement, “Today’s tentative agreement on record wages and an extension of the collective bargaining process represents critical progress toward a strong contract.” Congratulating the longshoremen of the ILA. “They deserve a strong contract after making so many sacrifices to keep the port open during the epidemic. I commend the port operators and carriers who are members of the U.S. Maritime Alliance for their hard work and strong offers,” as well as USMX. Vice President and Democratic presidential candidate Harris also expressed his appreciation for the agreement, stating, “This is about fairness – our economy works best when workers share in record profits. Longshoremen deserve a fair share for their hard work in providing essential goods to communities across America.”

President Biden has demonstrated an extremely pro-union stance in this instance, earning the appreciation of labor unions while raising questions both inside and outside the party. Some Democrats believe that Biden should not have let the strike hit the U.S. economy and logistics supply chain in order to support labor unions. Sen. Tim Kaine, D-Virginia, urged an early agreement. Scott Lincicome, deputy director of the Cato Institute, a pro-Democratic think tank, thinks Biden is “playing with fire” with his focus on union votes. The Republican Party did not pass up this “great opportunity” to attack the Biden administration’s inaction, and on September 25, Texas Republican Senator Ted Cruz said, “As usual, the Biden-Harris administration has failed to recognize the possibility of a strike, and has not shown leadership, let alone organized the parties to reach a deal to return to work.”

The impact of this strike has been multifaceted. Although the U.S. ports strike was well-documented, it negatively impacted the logistics and transportation industry, supply chains, commodity availability and the overall economy due to the magnitude of the strike and the fact that many companies did not prepare for it in advance. In the transportation sector, the temporary transshipment of a large number of containers caused disruption in the port logistics system. A large number of cargo ships were stranded at their original ports and grounded and floated at sea, waiting for the strike to end. The ports of Savannah, Norfolk and New York experienced an influx of cargo ships during the port strike. Cargo ships were lined up at these ports, causing some of them to simply leave. For example, the ship Stadt Dresden, which was expected to dock at the Port of Savannah, Georgia, turned around and headed for a port in Egypt. Although the strike ended quickly, it will take time for logistics to recover. Some logistics experts told CNN before the strike that a one-day closure at the port would take three to five days to recover. But port shutdowns are not only affected by strikes, they are also disrupted by extreme weather. Even if this is the first strike in decades, a three-day port shutdown is not unusual. The arrival of Hurricane Helen had already closed several ports in the Southeast before the strike. On the supply chain side, disruptions in the logistics and transportation industry immediately raised supply chain costs. The oversupply of distant alternative ports directly and dramatically increased the price of maritime transportation. Alternative transportation by trucks has also dramatically increased fuel and road costs as pressure on maritime transport is passed on to land transport. An analysis by the Institute of Development Studies at Fudan University shows that inland transportation costs more than 10 times the original cost of shipping. The U.S. logistics system was already under pressure on the last day of the strike, with CNBC reporting that “thousands of containers were dumped in the wrong ports” and “billions of dollars in trade were stranded on ships”. Supply chain experts told AP news that consumers won’t see the immediate impact of a short-term strike because most retailers stock up on goods and ship them early. But if a longer strike breaks out in the region, it would affect supply chains across the U.S. and cause shortages and higher prices. Export woes at East Coast ports could cause traffic jams at West Coast ports. Workers at the two coast ports are represented by different unions, which could cause further unrest. Railroads have told AP news they can expedite more shipments from the West Coast. But a study by analysts at AP news found they don’t have enough capacity to make up for the completely closed East Coast ports. Jay Dhokia, founder of Pro3PL, a supply chain management and logistics company, noted, “If the strikes continue, they will cause huge delays throughout the supply chain, a ripple effect that will undoubtedly go into 2025 and lead to disruption throughout the industry.” On the supply side of goods, disruptions in transportation and increased supply chain costs quickly affected grass-roots manufacturers, raising the possibility of shortages and price increases. The strike mainly affected agricultural products, automobiles and their parts, daily necessities, medical supplies and other products. Among the manufacturers, automakers including Mazda and other automakers and brands such as Nike were affected, with Walmart being the most affected. After the strike broke out, manufacturers urgently sought alternative supplies and managed inventory. Due to the short duration of the strike, the short-term prices have not yet risen significantly, manufacturers have also committed to the subsequent replenishment, the U.S. Department of Commerce said that “the supply will not be greatly affected.” But one of the core conflicts between labor and management, automation, has not yet been fully resolved, and the wave of automation is still poised for the next onslaught. The next port strike, which could break out again at any time, has severely affected confidence and expectations in East Coast and Gulf Coast cities. Consumer panic looting of goods continues to occur. Bill Simon, former CEO of Wal-Mart, analyzed that the American public looting supplies is worse than the actual price fluctuations, “After several years of inflation, the American consumer will quickly feel pressure on the price increase, which has produced a chilling effect …… they are not in a good mood.”

The strike came just before the election, and the two presidential candidates took the opportunity to garner more support and attack each other. Trump’ s victory in 2016 shattered the traditional view that unions were a voting strength for Democrats. The lack of support for the Democrats from the International Brotherhood of Teamsters, a large union, symbolizes the gradual loss of cohesion in the Democratic Party’s ability to use unions to rally all of its members to vote. The Trump team now also sees labor unions as a group of voters to be courted. Nonetheless, for now, Harris still has the edge in union support. After being the Democratic nominee, Harris inherited Biden’s legacy of union support, including large unions such as the United Auto Workers, the American Federation of Teachers, and the National Education Association. Emerson College polls show Harris with a substantial lead among unionized voters in places like Pennsylvania and Michigan. This strike has an immediate negative impact on Harris. Harris is still the vice president of the administration, and this incident is a direct stain on her tenure. At the same time, she has followed current President Biden in expressing an overly favorable view of labor unions, saying that they are striking “in the pursuit of fairness.” Her support may reap a large portion of the union vote, but the strike will also further implicate the Democrats and the current administration on economic issues where they have performed poorly. Compared to the Trump administration, the Biden-Harris administration has not fared well on issues such as economic growth and inflation levels. Although the Biden-Harris administration took immediate steps to address the situation right after the strike, the indulgence in shortages of goods and rising prices will still pull Harris down in the minds of voters. For Trump, this is a huge opportunity. He could use it to attack the Biden-Harris administration’s shortcomings on economic issues and the incompetence of Harris’ administration in managing prices and inflation. The day the strike broke out, Trump told Fox News that the current port strike was “caused by massive inflation caused by the Biden-Harris administration.” But regardless of the bipartisan fighting, this strike comes shortly before the election and is bound to have a knock-on effect on the election and the overall U.S. economy.

By Weifeng Sun