The International Longshoremen’s Association (ILA) port strike has made headlines this week as a major disruption in supply chains across the East and Gulf coasts, and FreightWaves has compiled a boatload of information to address frequently asked questions about the situation.
Why did this strike happen?
The ILA went on strike after union dockworkers and their employers with the United States Maritime Alliance (USMX) failed to reach an agreement for a new master contract. The ILA is demanding a significant wage increase, a higher starting wage, premier health care benefits and job security against automation.
Further reading on this question is available here.
Which ports are affected?
The ILA strike is occurring at 14 container ports along the East and Gulf coasts, including three of the U.S.’s five busiest ports: the Port of New York and New Jersey, the Port of Savannah, Georgia, and the Port of Houston.
The master contract covers containerized and roll-on/roll-off (ro/ro) cargo that moves through U.S. ports from Maine to Texas, which is primarily the 14 East and Gulf Coast ports where USMX members employ members of the ILA.
These ports include Boston; New York and New Jersey; Philadelphia; Baltimore; Norfolk, Virginia; Wilmington, North Carolina; Charleston, South Carolina; Savannah; Jacksonville, Miami and Tampa, Florida; Mobile, Alabama; New Orleans; and Houston.
When did contract negotiations start?
Negotiations for a new contract began last February and continued to flounder. The ILA and USMX reached a deadlock in September this year. The previous six-year contract expired on Monday.
What is the International Longshoremen’s Association, the union representing striking workers?
The ILA was founded in 1877 as the Association of Lumber Handlers. According to the union’s website, it today represents upwards of 85,000 longshoremen on the U.S. East and Gulf coasts, the Great lakes, major U.S. rivers, Puerto Rico, eastern Canada, and the Bahamas. It is the largest union of maritime workers in North America.
The ILA is led by President Harold Daggett.
What is the United States Maritime Alliance, the organization representing employers of dockworkers?
USMX is a nonprofit, incorporated membership association that represents employers of the East and Gulf Coast longshore industry. According to the organization’s website, membership consists of container carriers, all major marine terminal operators and port associations at ports on the East and Gulf coasts.
USMX is headquartered in Lyndhurst, New Jersey, and is led by CEO David Adam.
What is the estimated impact of this strike on the broader U.S. economy?
Reuters reported that the strike could cost the U.S. as much as $5 billion per day. Analysts have speculated that the strike could interrupt billions of dollars of imported goods at East and Gulf Coast ports, from cars and light trucks to electronics to food, clothing, jewelry, and agricultural products.
The strike could also negatively impact businesses going into the busy holiday shopping season, though retailers have accelerated imports in recent months to prepare for this.
Further reading on this question is available here.
Should consumers expect supply chain scarcity? (Is it time to stockpile toilet paper?)
For the moment, it is uncertain how the strike will affect the supply chain of areas impacted.
New York Gov. Kathy Hochul warned constituents Monday against panic-buying groceries. Despite calls for calm, there have been reports of worried shoppers cleaning out grocery store shelves in multiple states.
As for the toilet paper question, a North Carolina State College of Natural Resources study stated that more than 99% of the tissue products used by Americans are produced in the U.S.
“People need to calm down and stop buying more than what they need to allow inventories to remain stable,” said Ronalds Gonzalez, an associate professor in the Department of Forest Biomaterials at North Carolina State, in the study.
What is government doing about the strike?
President Joe Biden has said he will not invoke the Taft-Hartley Act to order union members back to work. In a statement from the White House on Tuesday, Biden called for ocean carriers to increase dockworker wages.
Thus far, the president appears to continue a display of solidarity with the ILA, leaving it to the union and USMX to reach a compromise.
How long is the strike expected to last?
Short answer: No one knows.
The ILA rejected USMX’s most recent contract offer of a 50% pay increase over six years on Wednesday. The union appears to be committed to seeking more concessions from USMX, including a stop on automating dockworker jobs.
If history is anything to go by, the last time the ILA went on strike in 1977 saw East and Gulf Coast supply chains halted for weeks. According to a North Jersey report, Will Brucher, a labor historian at Rutgers University in New Brunswick, said the ILA port strike of 1977 lasted 44 days.