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NORTH BERGEN, N.J.—Nearly 50,000 dockworkers represented by the International Longshoreman’s Association (ILA) union headed to the picket lines Tuesday, October 1, effectively freezing the flow of goods from 36 ports along the coasts from Maine to Texas.

“We are now demanding $5 an hour increase in wages for each of the six years of a new ILA-USMX Master Contract,” ILA President Harold Daggett released in a Tuesday statement, joining the picket lines at Port Newark and Port Elizabeth, both in New Jersey. “Plus, we want absolute airtight language that there will be no automation or semi-automation, and we are demanding all Container Royalty monies go to the ILA.”

The union initially demanded a 77% wage increase as well as the banning of automation or semi-automation of cranes, gates and container-moving trucks used in the loading and unloading of freight. While the ILA has not publicly disclosed average salaries of its workers, a 2022 report by the Water Commission, the agency which governs New York Harbor, stated that more than half of workers there made $150,000 a year or more.

The union’s contract expired on October 1 at midnight, after a months-long negotiation process with the U.S. Maritime Association. The Association offered a 50% increase in wages over the next six years on Monday evening, but union leadership stated it was not enough.

Daggett said the wage increase is to make up for inflation and years of small raises. The last time the ILA union went on strike was in 1977.

“Our position is firm: we believe in the value our incredible rank-and-file members bring to this industry and to our great nation,” ILA released in a statement on Facebook. “They deserve a contract that recognizes their contributions, secures their jobs, and reflects the profits generated by their labor.

The ports affected by the strike are some of the busiest ports in the country with nearly three fifths of the world’s cargo containers passing through. It’s estimated that the strike could cost the economy $3.8 to $4.5 billion a day, according to a JPMorgan analysis.

In addition, the strike could mean the jobs of over 105,000 workers, Oxford Economics estimates, as truckers and other workers who depend on the maritime industry face furloughs.

President Joe Biden could, under the 1947 Taft-Hartley Act, suspend the strike for 80 days if it was determined to have dangerous impacts to the nation’s economic health but the President currently has no plans to do so, considering the situation “collective bargaining.”

“Collective bargaining is the best way for workers to get the pay and benefits they deserve,” the President wrote in a statement. “My Administration will be monitoring for any price gouging activity that benefits foreign ocean carriers, including those on the USMX board.”

International Longshoreman’s Association President Harold Daggett joins picket lines throughout Port Newark/Elizabeth, New Jersey on October 1 at start of strike rallying tens of thousands of ILA members to stay strong and keep fighting.

SOURCE: @ILAUnion pic.twitter.com/lsb08zylL1

— Lynnwood Times (@LynnwoodTimes) October 1, 2024

Rep. Sam Graves (R-MO), Chairman of the U.S. House Transportation and Infrastructure Committee, authored a letter to President Biden Tuesday urging him to intervene.

“[T]he economic impacts of failing to intervene and bring the parties to the negotiating table will be wide ranging, leaving the American consumer paying higher prices as we approach the holidays. We urge you to immediately bring the parties together and restore the full capacity of our Nation’s commerce,” Rep. Graves wrote. ““The Biden-Harris Administration needs to put the good of economy and the country over politics and step in immediately to help resolve this potentially devastating crisis.”

Bobby Olvera, Jr., President, International Longshore and Warehouse Union (ILWU) stood beside ILA President Daggett in solidarity when the strike commenced at midnight on Tuesday. ILWU is the Pacific Coast labor union representing dock workers and is currently not joining the strike.

“Brothers and Sisters, on behalf of all the members of the ILWU, from Alaska to San Diego, British Columbia, and most definitely from the Islands of Hawaii, the ILWU stand with the ILA,” ILWU President Olvera said standing in solidarity with ILA President Daggett. “We are family- WE ARE ONE! Let one employer stand between us and see what happens. Let one Port Authority stand between us and see what happens. Let one elected official stand between the working men and women of the docks in North America and see what happens!”

Companies have already begun to reconsider shipping routes, detouring to the West Coast or shipping by plane, but perishable goods are likely to take the biggest hit by the increase in travel times.

For example, the affected ports handle 75% of the country’s banana imports, according to the American Farm Bureau Federation, and 80% of the country’s imported alcohol including beer, wine, whiskey, and scotch. Auto parts and retail goods are also expected to be affected just shy of the 2024 holiday shopping season. Ports on the gulf primarily receive coffee and plywood from South America and Southeast Asia.

Back in 2021, when the country experienced record-breaking supply chain shortages exacerbated by the pandemic and affecting inflation rates felt to this day, many companies began implementing contingency strategies which still could add 10-20% additional costs as cargo is redirected.

Consumers likely won’t see an immediate impact if the strike is resolved within weeks, experts say, but if the strike persists for months, costs for goods could begin to skyrocket going into 2025.

On the West Coast, the ILWU, which represents ports across Washington as well as California and Oregon, entered a six-year bargaining agreement back in 2022 to avoid a port shutdown. This bargaining agreement is in effect until 2028; therefore West Coast ports, including Tacoma and Seattle, will not be following in ILA’s footsteps.

According to the Pacific Maritime Association, dockworkers represented by ILWU make an average salary of $233 thousand a year—roughly three times that of the U.S. median household income.

The union’s British Columbia port went on strike in 2023 preventing billions of dollars’ worth of cargo from being received and transported.

Author: Kienan Briscoe