Longshoremen's strike begins on the East and Gulf Coasts

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According to the union, nearly 50,000 members of the International Longshoremen's Association (ILA) are striking on Tuesday against ports on the country's East and Gulf coasts, cutting off the flow of many of the country's imports and exports. This could be the most devastating work stoppage in America in decades.

The strike, which was also confirmed by the Port Authority of New York and New Jersey and the Port of Virginia, began at midnight. There appears to be a large gap between the union's demands and the offer from the United States Maritime Alliance, which uses the acronym USMX. The maritime alliance represents the major shipping companies, all of which are foreign-owned; as well as terminal operators and port authorities.

The strike will halt the flow of a variety of goods through the docks of nearly every freight port from Maine to Texas. This includes everything from bananas to European beer, wine, and spirits to furniture, clothing, household goods, and European automobiles, as well as parts needed to run U.S. factories and the work of American workers in those factories. It could also prevent U.S. exports from flowing through those ports now, hurting the sales of American companies.

“USMX launched this strike when it decided to hold on to foreign shipping companies that make billions of dollars in profits at United States ports, but not the American ILA longshoremen who do the work that makes them their wealth “ILA President Harold Daggett said in a statement released an hour after the strike began. “We are prepared to fight as long as necessary, to stay away from the strike for as long as necessary, to preserve the wages and anti-automation protections our ILA members deserve.”

USMX did not respond to requests for comment on the start of the strike.

Depending on the duration of the strike, there could be shortages of consumer and industrial goods, which could then lead to price increases. It could also represent a setback for the economy, which is showing signs of recovery from pandemic-related supply chain disruptions that have led to a rise in inflation.

The ports involved include the Port of New York and New Jersey, the third largest port in the country by cargo volume handled. This also includes ports with other specialties.

Port Wilmington, Delaware bills itself as the country's premier banana port, carrying a large share of America's most popular fruit. According to the American Farm Bureau, 1.2 million tons of bananas arrive through the affected ports, accounting for about a quarter of the country's banana production.

Other perishable goods such as cherries and a large proportion of imported wine, beer and liquor are also transported through the ports. The raw materials used by US food producers, such as cocoa and sugar, also make up a large part of the affected imports.

And many durable goods such as furniture and appliances are also imported through the affected ports. Retailers have been rushing in recent months to deliver the imported products they want to sell during the holiday season before the Oct. 1 strike deadline.

This is the first strike at these ports since 1977. While the union says about 50,000 members are covered by the collective bargaining agreement, the USMX estimates the number of port jobs to be closer to 25,000, with not enough jobs for all of the union's workers on a daily basis.

The USMX has complained that the union is not negotiating in good faith, saying the two sides have not met in person since June. The USMX said Monday it had expanded its offer to include wage increases of more than 50% over the proposed six-year contract, but a person familiar with the negotiations said the offer was rejected by the union. The ILA is not discussing its demands publicly, but was reportedly calling for annual salary increases earlier this weekend that would result in total increases of 77% over the life of the contract, with the top wage rising from $39 an hour to $69.

There are also disputes between the union and management over the use of automation at the ports, which the union said would cost some members their jobs. The USMX said it is offering to maintain the same contract language for the use of automation.

The union says it has continued to speak with USMX, but not in face-to-face negotiations. Leading up to the strike, it was said that management knew what it was asking for in order to reach a deal and that any strike was management's fault, not the union's. Given the level of profits in the shipping industry, the demands are reasonable.

Daggett, wearing a sweatshirt that read “The Docks are Ours,” addressed strikers outside the Port of New York and New Jersey in a video posted to an ILA Facebook page.

“I want to tell you that everything you are doing is right. What we do here goes down in history,” he said. He recalled the union's last strike, when he and other union members went on strike for three months to earn 80 cents more an hour.

“Now they're making billions and billions of dollars from the pandemic when we were all working. “Who are the greedy ones here?” he said. “We will show them…because without us nothing will move.”

Shipping costs skyrocketed during and immediately after the pandemic as supply chains collapsed and demand increased. According to analyst John McCown, the industry's profits from 2020 to 2023 totaled over $400 billion, which is believed to be more than the industry had generated in total since containerization began in 1957.

Companies that rely on the movement of goods are on the sidelines and are watching developments with great concern.

More than 200 business groups sent a letter to the White House last week calling on the Biden administration to intervene to prevent a strike, saying the country relies on both imports and exports moving through those ports .

“The last thing the supply chain, companies and employees … need is a strike or other disruption due to ongoing collective bargaining,” the letter said.

The U.S. Chamber of Commerce sent a follow-up letter Monday calling on President Joe Biden to exercise authority under the so-called Taft-Hartley Act, which was signed into law in 1947 to keep ports open and longshoremen on the job. President George W. Bush used the law in 2002 to stop an 11-day lockout of union members at West Coast ports.

But Biden told reporters on Sunday he has no intention of using the powers he has under Taft-Hartley.

“No,” Biden said. “Because it’s collective bargaining and I don’t believe in Taft-Hartley.”

It's also not clear whether simply telling union members to go back to work would actually result in cargo moving across the docks.

There are numerous ways workers can slow the flow of cargo while strictly adhering to the rules of the current contract. In a video released in early September, the ILA's Daggett said if members were forced to go back to work, they would likely move only a small fraction of their normal freight volume.

“Do you think these men will be working on this pier when (members) go back to work?” he said in the video message. “It will cost companies money to pay their salaries while it goes from 30 moves an hour to maybe eight.”

“Shipping companies are aware of the problem associated with Biden putting the union back to work,” said Peter Tirschwell, vice president of global intelligence and analytics at S&P Global Market Intelligence and chair of the TPM shipping conference.

“A senior shipowner told me yesterday, 'If they are forced to go back to work, they can make life hell for everyone,'” he told CNN last week.

This story has been updated with additional reporting and context.