Last week, we reported on whether or not the two U.S. Presidential candidates that squared off for a debate would mention a looming port strike. They didn’t. But, that doesn’t mean a strike has been averted. In fact, the possibility of a port strike is now greater than it was a week ago.
What’s the situation?
Yesterday was two weeks until October 1st, which is the deadline of the International Longshoremen’s Association (ILA) to negotiate a new contract or go on strike. The ILA represents over 45,000 port workers at ports on the U.S. East and Gulf Coasts.
The main sticking point in negotiations – which are ongoing, but have not yet yielded a deal – is the 77% compensation increase being demanded by the ILA.
If the pay increase is not agreed to, or if another agreement is not reached, these port workers will go on strike in less than two weeks, a development that is sure to cripple U.S. port and container traffic and bring excruciating shipping delays just weeks from Election Day.
Is the U.S. government getting involved?
To date, there are no signs of the U.S. government becoming involved in the negotiations. U.S. President Joe Biden had previously intervened to stave off a rail strike in recent years. The ILA has, to date, asked the U.S. government to stay out of the negotiations. However, the government reserves the right and to join and may get involved as a port strike looms ever closer.
And, this week, many industry groups in shipping and logistics issued a letter requesting the U.S. government to get involved and push a deal.
What do the parties think of a strike probability?
The ILA, in a new statement issued this week, called a strike “more likely” and has pointed to a history of lower-than-desired wage increases over the years. There seems to be a lot of pent-up frustration, which has limited progress on a deal.
The U.S. Maritime Alliance (USMX), for its part, have resisted a pay increase of the large amount requested. The USMX has noted that they have provided good counter-offers, but it hasn’t been enough for ILA workers.
Have ILA workers ever went on strike before and what would the effects be?
In the 1970s, there were work stoppages due to contract negotiations. And, in 1977, the longest strike on record – three months – took place. That strike was disruptive.
If workers go on strike this time, it would definitely be disruptive, especially with a global supply chain that has already experienced many disruptions in recent years. There will be one week of cargo blocklogs for every day of work stoppage, per estimates.
Large shipping carriers have begun reaching out to customers and informing them of the risks of delays, disruptions, and general uncertainty.
We now wait and hope that negotiations yield a deal, and a strike can be averted. It will be the right step for an industry has already seen too much volatility this year, and since the Covid pandemic.
