On Thursday, October 3rd, the International Longshoremen’s Association (ILA) agreed to a deal with the United States Maritime Alliance (USMX), effectively postponing their strike with a tentative deal on wages. On Tuesday, October 1st, nearly 50,000 longshoremen from the ILA went on strike across the East and Gulf Coast ports, disrupting billions of dollars worth of trade. The strike affected 14 major ports, including New York, New Jersey, and Miami, in a standoff over wage hikes and the potential for automation. This marked the first large-scale strike in nearly five decades at these ports, following the expiration of the ILA’s master contract with the United States Maritime Alliance.
ILA President Harold Daggett stated the union is demanding a $5-an-hour wage increase for each of the six years of the proposed contract, alongside stronger language opposing port automation. The USMX had offered a 50% wage hike over six years, but the offer was rejected. In the absence of an agreement, the union argues that the economic consequences will be significant. “If we have to be out here a month or two months, this world will collapse,” Daggett warned.
With the current existing contract extended to January 15th, 2025, both the ILA and the USMX have time to negotiate a new contract. In a joint statement, the ILA and USMX said, “The International Longshoremen’s Association and the United States Maritime Alliance, Ltd. have reached a tentative agreement on wages and have agreed to extend the Master Contract until January 15, 2025 to return to the bargaining table to negotiate all other outstanding issues.”
Another large issue yet to be addressed by the negotiations is protections against port automation, which many striking longshoremen have expressed concerns over.
The immediate effects of the 2-day-long strike are already being felt, with billions of dollars worth of goods, such as bananas, European beer, cars, and industrial components, stuck at the ports. The supply chain, already fragile from disruptions caused by recent global events like the Panama Canal drought, now faces additional strain. Experts predicted that even a one-week strike could have had a cascading effect, delaying shipments from Europe and Asia and causing a ripple of logistical challenges worldwide.
Industries highly dependent on port operations, such as pharmaceuticals and retail, will be particularly vulnerable when the contract deadline approaches again in January. Companies like Walmart and Home Depot are bracing for potential shortages ahead of the contract extension in case an agreement cannot be reached. Pharmaceutical supply chains, reliant on imported raw materials from places like India, would be at risk of delays that could affect drug production in the U.S.
President Biden, who many believed would end the strike by invoking the Taft-Hartley Act which would have forced workers back to work, released a statement following the announcement of the tentative deal applauding the ILA and USMX “for acting patriotically to reopen our ports and ensure the availability of critical supplies for Hurricane Helene recovery and rebuilding.”
