Contract negotiations between East Coast dockworkers and their employers have reached a stalemate, fueling growing concerns that the Port of Baltimore could face a shutdown for the second time this year.
With less than a week before their union contract expires, longshoremen from Maine through Texas have been offered “unacceptable” wage increases, the International Longshoremen’s Association said this week. The union says it is prepared to strike if no agreement is reached by Monday with the U.S. Maritime Alliance, or USMX, which represents employers such as shipping lines and marine terminal operators.
The ILA has 85,000 members. In Baltimore, three ILA union locals represent about 2,400 workers, most of whom load and unload ships. The numbers working on a given day typically is determined by the number of vessels at the port and other activity.
“The blame for a coast wide strike in a week that will shut down all ports on the Atlantic and Gulf Coasts falls squarely on the shoulders of USMX,” said Harold J. Daggett, the ILAs international president and chief negotiator, in a news release.
The Maritime Alliance has said the workers have refused to negotiate.
“Despite additional attempts by USMX to engage with the ILA and resume bargaining, we have been unable to schedule a meeting to continue negotiations on a new Master Contract,” the alliance said in a statement this week. “We remain prepared to bargain at any time, but both sides must come to the table if we are going to reach a deal, and there is no indication that the ILA is interested in negotiating at this time.”
Daggett called that claim misleading, saying “the two sides have communicated multiple times in recent weeks.”
Port of Baltimore officials said this week they are closely monitoring those talks and urged management and workers to come to an agreement. The state agency manages Baltimore’s six state-owned marine terminals but is not a party to the ILA contract, as it operates on a “landlord” model. The state has a partnership with Ports America Chesapeake to operate Seagirt Marine Terminal and others.
“We implore both sides to come together and negotiate an agreement that properly compensates the men and women of the ILA while maintaining cost effective and efficient cargo flows,” the Maryland Port Administration said in a statement.
Scott Cowan, president of ILA Local 333 in Baltimore, said Wednesday he had no comment at this time on a potential strike.
Jonathan Daniels, executive director of the port administration, previously told The Sun that a strike would hurt Baltimore’s port recovery .
Baltimore’s maritime facilities have been in recovery mode since the shipping channel was largely shut down for more than two months after the cargo ship Dali hit the Francis Scott Key Bridge. The March 26 accident caused the span to collapse and killed six roadway workers. So far, the rebound has been progressing, Daniels had said.
“Anything that may potentially engage in a work stoppage is something we are very concerned with, especially with where we currently stand on our rebound and recovery after the incident earlier this year,” Daniels said in an interview earlier this month. “This is a cascading effect that impacts all ports that have ILA labor.”
Port-related economic losses on the East and Gulf coasts could add up to as much as $5 billion a day, said Margaret Kidd, an instructional associate professor of supply chain and logistics technology at the University of Houston.
For every day the ILA is on strike, it would take an average five days to clear backlogs, which means a two-week strike could have implications into next year. Ultimately, prices would rise for manufacturers, shippers and consumers.
“This is a substantive labor action, because it will impact over half of the U.S. in terms of imports,” Kidd said. “It really becomes a potential economic tsunami to hit the U.S., if there’s a strike that goes beyond a few days.”
Baltimore, which handles more auto imports and exports than any other U.S. port, will see disruptions in that market, Kidd said. Last year, the port handled 847,158 cars and light trucks, the 13th consecutive year it has topped all other U.S. ports in that category.
An extended strike would disrupt fresh fruit and vegetable shipments from Central and South America and automotive and other parts for manufacturing, among other items, she said.
ILA has not walked out on such a large-scale on the East Coast since 1977, when a work stoppage lasted 45 days. But much has changed in nearly five decades as manufacturing has been outsourced globally, Kidd said.
Because large-scale strikes have been avoided on the East and Gulf coasts for so long, “I have to think as we get closer to Monday, both parties will be moving toward the middle to resolve the pay issues and concerns about automation” she said.
If not, she said, the federal government may be forced to intervene.
Facilities in Baltimore and other cities already have seen some cargo diverted to West Coast ports, which then is moved across the country by rail.
The National Tree Co., one of the nation’s largest importers and wholesalers of artificial Christmas trees and decor, has been preparing for a potential strike since July, scheduling deliveries by container ship earlier than usual and diverting East Coast shipments to the West Coast, said Chris Butler, CEO of New Jersey-based importer. The wholesaler imports products from Asia to sell to retailers such as Amazon, Lowe’s, Macy’s and Wayfair.
Despite those steps, “15% of my inventory stock will be on the water if a strike happens, and it’s anyone’s guess when it will end,” said Butler, adding that the ships “will just sit there … and it creates a huge backlog.”
He believes a strike is inevitable, potentially leading to about five days of delays for each day of a stoppage. But he’s hoping any interruption would be resolved before Thanksgiving and a holiday period that accounts on 50% of National Tree’s sales.
“We are hopeful that it doesn’t happen in the first place,” he said. “It would be a devastating blow to the economy and to companies like ours,” and likely lead to increased shipping prices next year.
Anne Sophie Fribourg, vice president of ocean freight for Zencargo, said the London-based freight forwarder saw a 30% jump in the volume of shipments to the East Coast during June, July and August. The company manages supply chain systems for importers and exporters on global routes, including the U.S.
“A lot of U.S. importers have anticipated the strike by bringing in cargo much ahead,” said Fribourg, who manages shipping lines for the company.
But additional cargo remains aboard ships on their way to the East Coast from China and Europe and slated to arrive after Monday. Other customers “are waiting to see what’s going to happen before they make the decision to ship cargo,” that’s either waiting in terminals or at suppliers.
Fribourg said she’s in been in touch daily with shipping lines that have begun to make contingency plans. But options are limited, considering the huge volume of goods shipped daily to East and Gulf coast ports, which handle about 60% of U.S. imports. Some ships will be diverted to the West Coast or wait for port re-openings.
“There will be a major disruption in terms of operations,” at terminals and rail facilities across the U.S., she said. “It’s going to be messy.”
Port officials have told the ILA in Baltimore that the port would set aside a “safe area” for members to gather outside marine terminals if necessary. Cruise operations and military cargo are not expected to be affected by a work stoppage.
Kidd said she believes workers’ requests for equity pay adjustments are reasonable, especially because global shipping companies posted record earnings during the pandemic. Ports, though, likely need to modernize technology and automation, areas that have been sticking points in negotiations.
“Our maritime workers and longshoremen in my mind are really modern day first responders,” Kidd said. “They kept America’s cargo moving. They kept food on our tables during COVID.”
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