ILA CONTRACT DEADLINE APPROACHES FOR EAST AND GULF COAST PORTS

As dockworkers on the East and Gulf coasts prepare to negotiate local port agreements ahead of the mid-May deadline set by their union president, management sources are divided on the risk of a strike as the September 30th expiration of the current contract approaches. While some believe a deal will be reached, others think a strike is imminent. Harold Daggett, president of the Longshoremen’s Association (ILA), stated last November that the union rank and file would not work beyond the expiration of the contract if a new deal was not in place, threatening the first strike on the East and Gulf coasts since 1977.

The International Longshoremen’s Association is the largest union of maritime workers in North America, representing upwards of 70,000 longshoremen on the Atlantic and Gulf Coasts, Great Lakes, major U.S. rivers, Puerto Rico and Eastern Canada.

The dockworkers want what they consider a fair share of the $400 billion in industry profits. Daggett announced his aim to achieve “the greatest master contract in our union’s history,” and he expects carriers to “deliver a landmark compensation package.”

Carriers see a much different picture as the market has changed since the pandemic. Carrier profits have plummeted by 88% industry-wide and were in loss-making territory by Q4 of 2023. However, the market has recently improved slightly, with 6% to 7% of global capacity being absorbed by vessel diversion around the Red Sea, and import volumes have been steadily recovering since last fall.

Both sides have an interest in reaching a deal before the contract expires on September 30th. Some carriers believe a contract will likely be reached, while others note some shipment diversion to the West Coast in anticipation of labor disruptions, though not significantly. Some management sources are in a wait-and-see mode as local agreements are reached before the coastwide discussion begins.

An indicator of how the negotiations might unfold can be seen from the ILA’s reaction to the deal negotiated last year by the International Longshore and Warehouse Union (ILWU). Many sources believe the ILA will benchmark its wage increase demands against the 32% increase over six years reached by the ILWU, although Daggett has expressed his dissatisfaction with government entities stepping in to avoid a large disruption.