Dockers could go on strike again if no deal is reached on automation

Eastern and Gulf Coast ports could close next week if longshoremen and employers cannot overcome major disagreements over the use of automated machinery to move cargo.

The International Longshoremen's Association, the union representing longshoremen, and the American Maritime Alliance, the employers' bargaining group, resumed in-person talks on Tuesday aimed at reaching a new labor contract.

After a short strike in October, unions and allies agreed to raise wages for longshore workers by 62% over six years, and other parts of the contract, including provisions governing automation technology, will be finalized on January 15. He said he would try to resolve the issue by then.

If no deal is reached by that date, the port, which accounts for three-fifths of U.S. container traffic, could be shut down, hurting businesses that rely on imports and exports and potentially presenting an early test for the new Trump administration. be.

“A strike would have a significant impact on the U.S. economy and supply chain,” said Dennis Montz, chief commercial officer at logistics payment platform PayCargo.

Unions are resisting automation, fearing the loss of port jobs. President-elect Donald J. Trump supported the union's position last month. “I study automation and know almost everything there is to know about it,” he said on his website Truth Social. “The money saved pales in comparison to the pain, injury, and harm it causes to American workers, in this case longshore workers.”

But those close to Trump have been critical of the unions, including Vivek Ramaswamy, who the president-elect has said will co-head an agency that advises the administration on slimming down the government. In October, Congressional Republicans called on President Biden to use the Taft-Hartley Act to force striking longshore workers back to work.

And while the maritime alliance has agreed to large increases, it may not be prepared to compromise as much on technology. Employers say the technology is needed to make the port more efficient and want a new contract to give them the freedom to introduce the type of machinery opposed by unions.

Jess Dankert, vice president of supply chain for the Retail Industry Leaders Association, which represents many companies, said companies are accelerating some imports and moving others to prepare for the potential closure of Eastern and Gulf ports. He said the company is delaying shipments and redirecting some to West Coast ports. Imported product.

“The contingency plans are pretty well thought out,” he said, but added that a strike lasting more than a week would have serious ramifications and it could take some time for the situation to subside.

The International Longshoremen's Association declined to comment.

Container shipping costs have increased by more than 60% on average over the past year. The main reason for this is that attacks on shipping in the Red Sea have forced shipping companies to take longer, more expensive routes and use more ships. In addition, some carriers have recently announced that they will add additional fees to shipping fees for containers destined for the Eastern and Gulf ports if they close.

In negotiations so far, the union has reached an agreement to increase hourly wages from $39 to $63 by the end of the new six-year contract. Due to shift work and overtime at some East Coast ports, salaries for many longshoremen can exceed well over $200,000 a year. (At the Ports of New York and New Jersey, nearly 60% of longshoremen earned between $100,000 and $200,000 in the 12 months ending in June 2020, according to data from an agency that helps oversee the ports.) )

But to achieve those pay increases, unions will need to reach an agreement on the remainder of the contract, including new clauses on automation.

The core of the technology dispute concerns “semi-automatic” port machinery that does not necessarily require human intervention. At the Port of Virginia, humans operate cranes to load containers onto trucks, but the cranes can also line up large quantities of containers themselves.

The last labor agreement allowed for the introduction of semi-automatic technology if both sides agreed on workforce protections and staffing levels. But in recent months, leaders of the International Longshoremen's Association have criticized port operators' use of semi-automatic technology, arguing that it will lead to job losses.

“Now, employers are coming for the last remaining jobs under the bright banner of semi-automation,” Dennis A. Daggett, the union's executive vice president, said in a message to members last month. said.

Employers want new contracts to allow them to implement more technology. In a statement to the New York Times last month, the maritime alliance said it was committed to maintaining job protections, but added: “Our focus now is to improve safety and reduce shipping volume. This is also a way to strengthen our ability to introduce additional equipment.” Efficiency, productivity, ability. ”

Even with automation, the Port of Virginia is hiring more longshoremen, according to union records. The increase in employment is largely due to the increase in the number of containers handled by the port.

“The Port of Virginia thrives on automation, and these are not mutually exclusive,” said Ram Ganeshan, professor of operations and supply chain at William & Mary in Williamsburg, Virginia. said.

Some labor experts said there was a model for compromise, with unions agreeing to more automation and employers potentially offering firm job guarantees.

More than a decade ago, the International Longshore and Warehouse Workers Union, which represents longshoremen on the West Coast, announced that “the introduction of new technology, including fully mechanized and robotically operated maritime terminals, will inevitably replace traditional coastal work.'' The company agreed to a contract stating that the workers would be replaced. ” The union received assurances that its members would maintain and repair the terminal's machinery.

Harry Katz, a professor at Cornell University's School of Industrial and Labor Relations, said the agreements on the East Coast and Bay Area were possible in part because employers were making enough profits to provide job guarantees. Ta. “I expect compromise,” he said.