MODE Global Advisory: Port Strike Looms

MODE GLOBAL ADVISORY: PORT STRIKE LOOMS

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WHAT WE KNOW The six-year-long International Longshoremen’s Association (ILA) and United States Maritime Alliance (USMX) contract is due to expire on September 30, 2024. The ILA has been positioning its members for a few years leading up to this expiration, and both sides appear to be very far apart as we are within two weeks of the deadline. With no clear negotiation in sight, businesses and the market are bracing for the impact of the proposed strike, which is slated to occur on October 1.

HOW WE CAN HELP In conjunction with MODE Global’s product lines and our long-standing partnerships, we can support and navigate long hauls from the West Coast to more challenging locations in the Midwest, South and Eastern United States. We provide: Strategic drayage partnerships around all major ports Nationwide cross-docking coverage at all rail ramps and ports Comprehensive portfolio of OTR partners to manage long-haul Long-standing partnerships with all major rail providers Transload pallet prep and block and brace capabilities With our existing capabilities and partnerships in the international space, we can accommodate various solutions to provide customers with business continuity in these uncertain and challenging times. We offer: FAK and commodity-specific rates via the West Coast and East and West Coast Canadian ports Expedited transport from China to Los Angeles/Long Beach Full air capabilities in/out of all major U.S. airports including expedited, next-flight and deferred options With MODE Global’s strength and relationships across all modes of shipping, we can seamlessly integrate and tailor solutions based on a broad spectrum of commodities, handling requirements and locations to manage your international cargo in an unpredictable logistics landscape.

If you are a current MODE customer, please reach out to your dedicated MODE family of brands representative. If you are not a customer and need help with your logistics, please reach out to our Solutions Experts.

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HOW WE GOT HERE Some key events leading up to today according to JOC.com: SEPTEMBER 2022: Local chapters are urged to start port-specific talks regarding local benefits and work rules.

MARCH 2023: USMX made an initial contract offer for a 32% wage increase and $70 million bonus.

ILA turned down the initial contract offer citing the wage increases were too low and requiring the ILA to gain jurisdiction in Savannah, Charleston and Wilmington, North Carolina terminals that were currently employing non-ILA workers.

JULY 2023: ILA advises that only two, New York/New Jersey and Baltimore, of the 14 ports had come to tentative terms on local agreements.

USMX advised they will help to guide the local discussions so the ILA is comfortable discussing the master contract.

OCTOBER 2023: ILA and USMX met; ILA laid out its terms for the master agreement. ILA left the meeting after 2.5 hours because the USMX “wanted to play hardball.”

NOVEMBER 2023: ILA President, Harold Daggett, advised union members that if significant increases and limits on automation were not met they should be prepared to walk off the job in September of 2024. He advised them to “start saving money because that day may come.” He also advised that they do not want any government involvement if negotiations are not going well.

FEBRUARY 2024: ILA president gives local chapters a deadline of May 2024 to finalize local bargaining talks regarding benefits and rules.

MAY 2024: Local port discussions conclude to allow for USMX and ILA to come to the table to discuss the master agreement.

JUNE 2024: ILA cancels initial talks citing certain terminals are using auto gate systems, which autonomously process trucks. ILA says this violates the current agreement, and they will not resume talks until the issue is resolved.

JULY 2024: ILA president stands firm on statements from the previous November and advises that a strike is more likely to happen as USMX will not come to the table. He also doubled down in advising that there will be no government intervention to push this negotiation along.

AUGUST 2024: Ocean carrier sources leaked that the ILA is seeking a 76% increase over six years in straight-line wages for port workers.

Maersk CEO, as part of the USMX alliance, advises that a strike is “highly unlikely” and expects an extension of the existing contract to be reached as there are still many issues to discuss.

USMX provides its latest contract proposal that includes “industry-leading wage increases, boosts employer retirement contributions, offers new employees higher starting wages, raises employer contributions to local benefits and continues to provide premiere health coverage.” The ILA responded that the wage proposal was inadequate and that they were still very far apart.

SEPTEMBER 2024 ILA reiterates they are very far apart on the economics of the contract, specifically citing the wage increases. ILA demands stronger contract language regarding automation due to terminal operators using auto gate systems.

USMX urges ILA to resume negotiations. Sources say the most recent offer included a 39% increase in wages over six years, banned fully automated terminals, required consulting ILA for any semi-automation and pledged to increase retirement contributions and entry-level salaries.

ILA outright rejected the proposal based on the wage increase being only half of what was being requested, and the union was also looking for greater health coverage and stronger language on automation, banning semiautomation. They also noted certain port surveillance equipment is an intrusion of privacy and creates a hostile environment.

President Joe Biden does not intend to impose an 80-day cooling-off period under the federal Taft-Hartley Act, which would force port workers back to their jobs. The U.S. government will continue to monitor and push both sides to come to a resolution while keeping no involvement in the discussions.

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