With less than a month until the current union contract expires at the East and Gulf Coast ports and formal negotiations still at a standstill, it appears the dockworkers are playing hardball.
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A report from the Wall Street Journal says the International Longshoremen’s Association (ILA) is pushing for a six-year contract that includes a 77 percent pay increase for its 45,000 workers.
The union is meeting Wednesday and Thursday in New Jersey to iron out the final contract demands .
Since last November, the ILA has been insistent that if its employers, the United States Maritime Alliance (USMX), don’t cater to their demands, the union workers will go on strike Oct. 1 across all 36 ports stretching from Texas to Maine.
Previous reports indicated that the ILA had targeted a wage increase above the 32 percent increase that its West Coast dockworker counterparts, the International Longshore and Warehouse Union (ILWU), procured when it signed and ratified a six-year contract last summer.
Under the latest West Coast contract, longshoremen with 4,000 hours of experience earn $54.85 per hour as of June 29, with the hourly number increasing by $2 every year through 2027. Hourly salaries are as high as $68.56 for trainee and journeymen mechanics and $74.05 for lead mechanics. A New York Times report said that across positions, the average West Coast longshoremen earned $218,000 last year, including overtime and higher wages for evening and night shifts.
Conversely, East Coast dockworkers have a far lower pay scale, with six-year veterans making $39 an hour as of Oct. 1, 2023. The gap between East and West Coast hourly rates goes a long way in explaining the ILA’s reported demands. Additionally, while the ILWU has a single coast-wide pension, those benefits aren’t consistent across East and Gulf Coast ports.
The ILA would not comment on the matter, but has previously said that it was demanding wage hikes “commensurate” with the revenues and profits generated by companies USMX members in recent years. USMX members include container shipping giants like Mediterranean Shipping Company (MSC), Maersk and CMA CGM, as well as various port terminal operators.
Although talks have not resumed, and will not until the union concludes its internal meeting, at least one positive development has risen in recent weeks. Both the ILA and USMX contacted the Federal Mediation & Conciliation Service (FMCS) in late August, with the intent on getting a mediator involved in the talks.
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The East and Gulf Coast ports last required mediation in December 2012. During those negotiations, mediators were able to extend the expiring master contract 30 days, enabling the parties to agree to a six-year deal on Feb. 1, 2013.
Of course, wages have not been the only barrier to getting a deal knocked out. Automation has been a central point of concern for the union, with the ILA cutting off talks in June due to the use of an automated gate at Alabama’s Port of Mobile and other unnamed ports.
While port operators within the USMX contend that automated equipment at the ports is a necessity to ensure that cargo flows more efficiently, workers are constantly worried about threats to their jobs, and as such have railed against their deployment.
North American ports have been long considered to be behind counterparts in China, southeast Asia and the Middle East when it comes to efficiency in loading and unloading cargo. However, East and Gulf Coast ports appear to perform better than their West Coast counterparts, according to The Container Port Performance Index released by the World Bank and S&P Global in June. Philadelphia is the best-performing port in the U.S. and Canada, with Charleston and Port Everglades rounding out the top three, the index says.
Under the terms of the current contract, East and Gulf Coast ports are not allowed to use fully automated terminals or equipment, with the technology defined as “machinery/equipment devoid of human interaction.”
Terms also require that the terminals don’t implement semi-automated equipment or technology “until both parties agree to workforce protections and staffing levels.”
A potential strike has already been forcing shippers to divert cargo to the West Coast ports, as hubs in Los Angeles, Long Beach, Seattle and Tacoma have seen major jumps in inbound cargo throughout the summer.
If neither party comes to a new deal, a port strike would cause a headache to the shippers that had risked staying the course by continuing to move goods to the East and Gulf Coasts. Maritime trade advisory service Sea-Intelligence said it would take six days to clear the backlog from one day of strike action. If a work stoppage lasted a week, cargo wouldn’t be able to be cleared until mid-November.
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