Port workers strike on East and Gulf coasts

Port workers strike on East and Gulf coasts

For the first time in nearly 50 years, longshoremen on the East and Gulf coasts went on strike Tuesday, a move that would shut down most trade through some of the busiest U.S. ports and send a chill through the economy.

Members of the International Longshoremen's Association union, which represents about 45,000 workers, began picketing after 11-hour negotiations failed to avert a work stoppage.

“Nothing moves without us – nothing,” said Harold J. Daggett, the union president, addressed picketers outside a port terminal in Elizabeth, N.J., in a video posted to a union Facebook account Tuesday morning.

The United States Maritime Alliance, which represents port employers, declined to comment early Tuesday. The two sides could not agree on wage increases, and the use of new technology at the port was a sticking point for the union.

Businesses now face uncertain times. Trade experts say a short strike will cause little lasting damage but could lead to a week-long stoppage of shortages, higher prices and even layoffs.

“When we talk about two to three weeks of strikes,” said Jay, a transportation analyst at Wall Street firm Stifel. “That's when the problem started getting worse,” says Bruce Chan.

The prospect of significant economic damage from the strike has left President Biden reeling five weeks before a national election. Before the strike, he said he was not going to use a federal labor law to stop a port shutdown — something President George W. Bush did in 2002 — but some labor experts said he might use that power if a strike began. Weighing in on the economy. White House officials pressed the two sides to reach an agreement before the strike.

Longshoremen remove containers from ships, sort and place them on trucks or trains and also handle bulk cargo. About three-fifths of the nation's container shipments go through East and Gulf Coast ports, including the ports of New York and New Jersey, which are the nation's third busiest, and the fastest-growing ports in Virginia, Georgia, and Texas.

A strike would also halt the shipment of cars and heavy equipment through the Port of Baltimore, where operations were curtailed for most of the spring after a container ship crashed on the Francis Scott Key Bridge.

Automakers said they were monitoring the strike but it was too early to say how it would affect them.

Cruise ship operations are not affected by the strike, and military shipments will continue. Rick Cotton, executive director of the Port Authority of New York and New Jersey, said Monday that about 100,000 containers will be stored at the port during the strike and 35 ships arriving next week will be anchored offshore.

“The bond is too high,” New York Gov. Cathy Hochul said at a news conference Monday. “The potential for disruption is significant But he tried to reassure consumers, saying shortages of food and medicine were not expected.

Ports have no real option to bring in large volumes of goods in and out of the country. And ports can't function without longshoremen, giving them powerful leverage in labor negotiations.

West coast ports are open. Longshoremen there belong to a different union and last year agreed to a new contract that includes significant wage increases.

Under the contract that expired Monday, longshoremen on the East and Gulf Coasts earned a top rate of $39 an hour. The ILA wants a $5-an-hour increase in each of the six years of a new contract, giving it a 77 percent increase over the life of the contract.

The two sides had barely communicated for months before the walkout. But in recent days, the Maritime Alliance said Monday, it has “traded wage-related counter-offers” with the ILA and offered to extend the contract. The coalition also said its latest offer to the union would increase pay by “about 50 percent” during the contract period.

In a statement on Tuesday morning, the ILA said the coalition's offer was “far short” of what its members were demanding.

Through overtime and shift work, many longshoremen earn more than $100,000 a year, putting them ahead of other workers without college degrees. But they say they put in far longer hours than workers in other jobs earning the same amount, and often do so in harsh or dangerous conditions.

High inflation in the past few years has reduced the purchasing power of their wages. And longshoremen claim they are entitled to a share of the increased profits their employers – including some major global shipping lines – will make during the pandemic trade boom in 2021 and 2022.

“They want to make their billion-dollar profits at US ports, and on the backs of American ILA longshore workers, and take those earnings out of this country,” Mr. Daggett, the union president, said in a statement Monday.

Knowing a strike was possible, many companies rushed to stock up on merchandise ahead of Tuesday, including mostly consumer durables that they plan to sell during holiday sales. But even a short strike can hurt importers of perishable goods like fruits.

Daniel J. Barbino, chief operating officer of fruit distributor Top Banana, based in the Hunts Point Produce Market in the Bronx, said the strike could run out of bananas, its main product, by the end of next week. “It's going to be everybody in the region, all the banana importers — nobody's going to get the fruit,” he said.

Mr. Barabino added that shipping fruit by air is too expensive. And he said he could not make up the shortfall by selling products other than bananas. “They pay the coffee bill, maybe the bottled water bill,” he said, “but they're not paying the electric bill, rent, truck lease or employee salaries.”

The ILA last operated across all East and Gulf Coast ports in 1977, snarling container shipping for more than six weeks. The deal that ended the strike included employers offering higher wages, increased contributions to pension plans and measures to address concerns that new technology could lead to job losses.

ILA is still fighting against automation. It ended talks in June with Maritime Alliance, a port in Mobile, Ala. Inspecting trucks using technology not permitted under his labor contract. (The technology has been in use since the port opened in 2008, said a source familiar with its operations.)

Under the expired agreement, port operators were allowed to use “semi-automated” technology but equipment “without human interaction”. The Maritime Alliance said it offered to carry that commitment into a new contract in recent negotiations.

Recently, other unions have gotten much of what they wanted in contract negotiations, and labor experts say the ILA hopes to capitalize on that winning run.

“The union has shown it's fighting hard,” Harley said Shaiken, a professor emeritus at the University of California, Berkeley, who specializes in labor and trade. “Employers' associations are also well aware that the wider environment is one that has delivered strikes for unions over the last year or so.”

Neil E. Baudet Contribution reporting.

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