Washington Just as President-elect Donald Trump arrives to the White House, 45,000 U.S. longshoremen are threatening to go on strike, vowing to stop machines from taking their jobs. The walkout would shut down ports on the East and Gulf coasts and might harm the American economy.
The International Longshoremen’s Association dockworkers who organized the three-day walkout last fall are the reason the impasse sounds familiar. They reached a tentative agreement with ports and shipping corporations for a 62% salary increase over six years, and in October they paused the strike until January 15. However, union members cannot get the extra earnings until they accept a final deal.
Things become complex at that point.
The ILA and the U.S. Maritime Alliance, which advocates for shippers and ports, resumed negotiations Tuesday. A recurring issue in American ports is the substitution of technology for human labor, particularly semi-automated cranes that maneuver containers onto trucks or trains using software or remote workers. Traditional cranes are operated by a human.
Harold Daggett, the union’s president, is adamantly opposed to permitting more automation at ports on the East and Gulf coasts, including the Port of Houston. They contend that human labor is still more efficient than the machines.
Dennis Daggett, the union’s executive vice president and Daggett’s son, stated last month that “this isn’t about meeting operational needs.” “The goal is to maximize corporate profits by replacing workers under the pretense of progress, at the expense of well-paying, family-sustaining jobs in the United States.”
U.S. ports are lagging behind more automated ports like those in Rotterdam, Dubai, and Singapore, according to port operators and shipping corporations.
The two parties will have just one week to come to an agreement before the strike deadline of January 15.
Jonathan Gold, a vice president of the National Retail Federation who deals with supply chain and trade concerns, said, “They’re not giving themselves a whole lot of time.”
The union has already heard from Trump. The president-elect said on social media that more port automation would harm workers after meeting Harold Daggett at the Mar-a-Lago club in Palm Beach, Florida: “The amount of money saved is nowhere near the distress, hurt and harm it causes for American workers, in this case, our Longshoremen.” Additionally, Trump claimed to be knowledgeable on “almost everything there is to know about” automation.
For the American economy, the stakes are huge. More than half of the country’s shipping container traffic, which includes everything from cellphones to fresh fruit to cars, is handled by ports on the East and Gulf coasts. Shipping containers are the steel boxes at the heart of global trade.
According to Moody’s Analytics chief economist Mark Zandi, “a strike lasting less than a week won’t have a material impact on the broader economy.” “Generally speaking, inventories are plenty, preventing shortages. On the other hand, if the strike lasts more than a week, it would lead to greater disruptions and shortages, which will increase the economic expenses, which will go from an estimated $500 million per day to over $2 billion per day.
According to Gold of the retail federation, supply networks need three to five days to recover from a single disruption. “You’re in big trouble if you stay anywhere more than five days,” he stated. “After that, you’ll need to recover for weeks.” He claimed that it “took close to six months to recover from” an 11-day suspension at West Coast ports in 2002.
According to Christina Boni of rating agency Moody’s Ratings, a longer strike might reduce retail profitability since it would cause future deliveries to be delayed, resulting in fashion and seasonal goods arriving after their peak selling time. This would lead to decreased sales and a rise in markdowns to clear these goods. linger fall’s brief walkout ended before it could affect shipments for the holidays and didn’t linger long enough to cause significant economic harm.
Businesses are taking action to prevent possible strike-related damage. Shipments are being redirected to Canada or the West Coast by some. In an effort to “avoid any possible disruptions at the terminals,” the Danish shipping behemoth Maersk last week asked its clients to pick up loaded containers from ports before January 15.
Some shippers are charging strike-related costs to their clients. For example, Hapag-Lloyd, a German transportation operator, announced a “work disruption surcharge” of $850 for 20-foot containers and $1,700 for 40-foot containers that will take effect on January 20.
The highest-paid dockworkers, who now have a contract with the Maritime Alliance, make $39 per hour, or $81,000 annually. The agreement, which was informally reached in October, would raise the top hourly salary to above $60 per hour.
A third of the longshoremen employed in New York Harbor earned $200,000 or more per year, including overtime, according to a 2019–2020 study by the Waterfront Commission, which is in charge of the harbor. The royalties that employees receive from the cargo that passes through the ports—which can total thousands of dollars annually—were not included in that.
Whether automation increases port efficiency or harms dockworkers is a topic of scant agreement.
Although they acknowledged that technological advancements could alter the situation in the future, experts from the Center for Innovation in Transport in Barcelona, Spain, came to the conclusion in 2023 that “there is no clear evidence confirming that automated terminals outperform conventional ones.”
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