Ports on the East and Gulf coasts could close next week if dockworkers and employers cannot overcome their wide differences over the use of automated machines to move cargo.
The International Longshoremen's Association, the union representing longshore workers, and the United States Maritime Alliance, the employers' negotiating group, on Tuesday resumed in-person talks aimed at forging a new labor contract.
After a brief strike in October, the union and alliance agreed to a 62 percent raise over six years for longshoremen and said they would try to resolve other parts of the contract, including provisions governing automated technology, by Jan. 15. .
If they don't reach a deal by then, ports that account for three-fifths of U.S. container shipments could close, hurting businesses that rely on imports and exports and providing an early test for the new Trump administration.
“If there is a strike, it will have a significant impact on the US economy and the supply chain,” said Dennis Monts, chief commercial officer at PayCargo, a logistics payments platform.
The union resists automation because it fears the loss of jobs in the ports. President-elect Donald J. Trump threw his support behind the union's position last month. “I've studied automation and know almost everything there is to know about it,” he said on his Truth Social website. “The amount of money saved is nowhere near the anguish, pain and harm it causes to American workers, in this case, our longshoremen.”
But figures close to Trump, such as Vivek Ramaswamy, who the president-elect says will co-lead an agency that will advise his administration on how to reduce the size of government, have criticized the merger. In October, Republicans in Congress called on President Biden to use the Taft-Hartley Act to force striking longshoremen to return to work.
And while the maritime alliance has agreed to a significant increase, it may not be so willing to compromise on technology. Employers say the technology is needed to make ports more efficient and they want the new contract to give them more room to introduce the type of machinery the union opposes.
To prepare for the possible closure of East and Gulf Coast ports, companies have accelerated some imports, delayed others and diverted some to West Coast ports, said Jess Dankert, vice president of supply chain for the Association of Retail Industry Leaders, representing many companies that import goods.
“The contingency plans are pretty well developed,” he said, but added that a strike lasting more than a week would have significant ripple effects that could take a while to unravel.
The International Longshoremen's Association declined to comment.
The cost of shipping a container has risen more than 60 percent on average over the past year, largely because attacks on shipping in the Red Sea have forced ocean carriers to travel longer, more expensive routes and use more boats. And if East and Gulf Coast ports close, some shippers said recently, they will add surcharges to shipping rates for containers destined for those ports.
In previous negotiations, the union reached an agreement that would raise wages to $63 an hour, from $39, at the end of a new six-year contract. With shift work and overtime, the pay of many longshoremen at some East Coast ports could rise to more than $200,000 a year. (At the Port of New York and New Jersey, nearly 60 percent of longshoremen earned between $100,000 and $200,000 in the 12 months through June 2020, the latest figures available, according to data from an agency that helped oversee the port ).
But to get those raises, the union will have to reach an agreement on the rest of the contract, including new provisions on automation.
The core of the technological dispute has to do with “semi-automatic” port machinery that does not always require human participation. At the Port of Virginia, humans operate cranes that load containers onto trucks, but the cranes can also organize large stacks of containers on their own.
The last labor contract allowed for the introduction of semi-automated technology when both sides agreed to workforce protections and staffing levels. But in recent months, leaders of the International Longshoremen's Association have criticized port operators' use of semi-automated technology, arguing it will lead to job losses.
“Now, employers are looking for the last remaining jobs under the shining banner of semi-automation,” said Dennis A. Daggett, the union's executive vice president. he wrote in a message to members last month.
Businessmen want the new contract to allow them to introduce more technology. In a statement to the New York Times last month, the maritime alliance said it was committed to maintaining labor protections, but added: “Our focus now is how to also strengthen the ability to deploy equipment that enhances safety and increases safety.” efficiency, productivity and capacity.”
Even with automation, longshoreman hiring has increased at the Port of Virginia, according to union records. The increase in the number of containers handled by the port largely explains the increase in contracting.
“The Port of Virginia is thriving with automation,” said Ram Ganeshan, a professor of operations and supply chain at William & Mary in Williamsburg, Virginia. “They are not mutually exclusive.”
Some labor experts said there was a compromise model: The union could accept more automation and employers would offer strong job guarantees.
The International Longshore and Warehouse Union, which represents West Coast dockworkers, agreed a contract more than a decade ago which “recognized that the introduction of new technologies, including fully mechanized and robot-operated maritime terminals, necessarily displaces traditional port labor and workers.” The union obtained guarantees that its members would maintain and repair the terminal machinery.
Harry Katz, a professor at Cornell University's School of Industrial and Labor Relations, said an agreement on the East and Gulf coasts was possible in part because employers were profitable enough to offer job guarantees. “I hope for a compromise,” he said.
