International Longshoremen’s Association President Harold Daggett recently made it crystal clear to the shipping industry that his purpose is to protect the interest of his union workers, even if that means shutting down the East and Gulf coast docks.
One of the big sticking points in the upcoming contract negotiations this year between the ILA and liner carriers will be how much more automation to inject into the waterfront.
Daggett warned any technology improvements allowed under his watch will supplement labor, not supplant it, as he said has happened in some major European ports. “We are not going to stand for it. That is definitely going to be a strike issue,” he told attendees at the Transpacific Maritime Conference in early March.
It may be easy to dismiss Daggett’s words as grandstanding. When was the last time the ILA caused mayhem for American shippers?
Most of today’s supply chain managers are too young to remember the ILA’s 1977 coastwise shutdown, which brought a bulk of the country’s container traffic — then mostly dependent on East Coast ports — to a grinding halt. But surely many will recall the millions of dollars lost to supply chain disruptions caused by the breakdown in contract negotiations between the West Coast’s International Longshore and Warehouse Union and the carriers in 2002, resulting in a two-week lockout. That’s when many shippers re-learned it was unsafe to rely on a single coast’s ports to handle all their containerized freight.
With larger containerships coming to U.S. shores, dockworkers — like their counterparts in other industries — are under increasing pressure to do more with less and automation will play an increasing role in accomplishing that. However, this doesn’t mean unions won’t fight this change by orchestrating work stoppages.
Thus, smart shippers, while not running away from their East and Gulf coast operations, are better off heeding the ILA’s threat. First, they will want to assess their freight volumes entering and exiting East and Gulf coast ports to understand their exposure to a potential ILA strike, and if necessary shift some volumes back to West Coast ports until the contract between the liner carriers and union is concluded.
It simply comes down to shippers having contingency plans in place, just like they already should for unforeseen man-made or natural disasters that could temporarily paralyze cargo flows in key geographic regions. Shippers who get caught off guard due to an ILA strike will only have themselves to blame because they already have plenty of warning and ample time to prepare.
More than dock-side bluster
