U.S. Port Strike on the East and Gulf Coasts Likely by October 1

Unless a last-minute deal is reached, the strike could freeze operations at up to 14 key ports and significantly affect the U.S. economy.

The International Longshoremen’s Association (ILA) threatened a port strike starting at 12:01 AM on October 1, 2024, if no contract agreement is reached with the United States Maritime Alliance (USMX).

The anticipated port strike could disrupt the movement of essential goods by halting container and roll-on/roll-off operations at up to 14 ports in key locations, such as the Ports of New York and New Jersey, Savannah, Charleston, and Houston.

ILA is trying to negotiate new contract terms for more than 45,000 unionized port workers whose contracts expire this month. After more than a year of negotiations, ILA threatened to initiate a port strike to fulfill its members' demands.

The six-year port worker contracts expire on September 30, and negotiations over new terms have stalled.

The ILA had called off talks in June over accusations that employers were using autonomous gate technology at the Port of Mobile, Alabama, which they claim bypassed union labour.

USMX countered by stating the technology had been in use since 2008, long before the 2018 agreement with port workers was signed.

If they take place, last-minute negotiations will be crucial in determining whether the U.S. avoids port shutdowns on its East and Gulf coasts. 

Key issues on the negotiation table

At the heart of the dispute between the ILA and USMX are several unresolved issues, including:

• Wage increases: The ILA is reportedly seeking a significant pay increase, possibly up to 77%, to close the wage gap with other major port workers.
• Technology concerns: The ILA wants to retain existing job protections against automation and semi-automation.
• Health and retirement benefits: The union is pushing for more employer contributions to healthcare and retirement plans.

Negotiations between the ILA and USMX continue to fail

Far from reaching an agreement, both the ILA and USMX filed a Notice to Mediation Agencies (Form F-7) with the Federal Mediation & Conciliation Service (FMCS) in late August.

The filing of this notice does not necessarily indicate a commitment to mediation, but it informs the FMCS of the dispute.

Union President Harold Daggett hinted at the possibility of global port worker solidarity. However, it remains unclear how much support this has received.

USMX has expressed its desire to continue negotiations and reach a deal without a port strike.

“USMX remains committed and prepared to resume negotiations with the ILA on a new Master Contract before the current agreement expires and to avoid a strike,” the employers stated in a release.

Despite this, port employers expressed concerns that the ILA seems determined to strike.

“The ILA continues to strongly signal it has already made the decision to call a strike and we hope the ILA will reopen dialogue and share its current contract demands so we can work together on a new deal, as we have done successfully for nearly 50 years,” the employers added.

The impact of a port strike on U.S. imports and exports

The ports on the East Coast and the Gulf handle approximately 43% of all imports into the United States.

Sea-Intelligence, a key provider of research & analysis, data services, and advisory services within the global supply chain industry, released a statement on August 14, indicating that a port strike would significantly impact container shipments.

“Using historical data, we estimate U.S. East Coast handling volumes of 2.3 million TEU in October, which translates into 74,000 TEU per day, split 36,000 on imports and 38,000 on exports. For empties alone, a strike would mean the inability to load 20,000 TEU each day,” Sea-Intelligence stated. 

An ongoing wave of freight worker actions

The latest surge in labour dispute is part of a series of freight worker strikes in recent years that have affected ports, railways, and logistics companies across North America.

Last month, Canada suffered a rail stoppage when employees at the two biggest railway companies, CN and CPKC, went on strike. The federal government intervened, and the two companies resumed operations in less than a day. But despite this short freeze, the Canadian economy and several industries were impacted.

Similarly, last year witnessed what was called the summer of strikes, with a wave of freight stoppages in both the U.S. and Canada.  

During that summer, the U.S. West Coast was hit by a wave of strike actions when negotiations stalled between the ILWU and the Pacific Maritime Association (PMA), which represents West Coast terminal operators. The two parties finally reached a tentative agreement in August that included a 32% increase in pay for port workers.

Canadian West Coast port workers also went on a 13-day strike during that summer, known as the Longshore Strike. It cost Canada $10 billion in trade freeze at its busiest port in Vancouver, British Columbia.

Please reach out to one of our trade professionals for more information about how a port strike could impact your imports into the U.S.