Major Port Shutdown: ILA Dockworkers Hit the Picket Lines, Halting Operations on Atlantic and Gulf Coasts

The International Longshoremen’s Association (ILA) initiated a widespread strike on Tuesday, shutting down all ports from Maine to Texas as of midnight this morning.

This action, affecting 45,000 port workers at 36 ports representing about half of all U.S. containerized imports and exports during ocean peak season, marks the first ILA coast-wide strike in nearly five decades.

The strike commenced at 12:01 a.m. as ILA members established picket lines along the Atlantic and Gulf Coasts. The dispute centers on wage increases and protections against automation, with the United States Maritime Alliance (USMX) and ILA failing to reach an agreement despite last-minute negotiations.

USMX’s final offer included a nearly 50% wage increase, doubled employer contributions to retirement plans, improved healthcare options, and maintained current language on automation.

However, ILA President Harold Daggett stated, “USMX brought on this strike when they decided to hold firm to foreign owned Ocean Carriers earning billion-dollar profits at United States ports, but not compensate the American ILA longshore workers who perform the labor that brings them their wealth.”

The ILA, the largest maritime union in North America representing approximately 85,000 longshoremen, rejected USMX’s proposal, deeming it insufficient to meet their members’ demands. Previous reporting indicated the union had sought a 77% pay increase, but new reporting says the union has lowered its wage increase demand to 61.5%.

“We are prepared to fight as long as necessary, to stay out on strike for whatever period of time it takes, to get the wages and protections against automation our ILA members deserve,” Daggett.

This strike is expected to significantly impact both imports and exports, including roll-on/roll-off operations, potentially causing widespread disruptions to the supply chain. As negotiations stall, the economic implications of this port shutdown are likely to escalate, affecting businesses and consumers across the nation.

“USMX owns this strike now,” said Daggett. “They now must meet our demands for this strike to end.”

The work stoppage threatens to worsen already strained ocean supply chains, which have faced significant disruptions in 2024 due to conflicts in the Red Sea, drought in the Panama Canal, and the Baltimore bridge collapse.

Taft-Hartley Act

Despite the high stakes, the Biden administration has indicated that the president does not plan to invoke the Taft-Hartley Act, which allows presidential intervention in labor disputes that create a national emergency.

Transportation and Infrastructure Committee Chairman Sam Graves (R-MO) and Coast Guard and Maritime Transportation Subcommittee Chairman Daniel Webster (R-FL) have called on President Biden use his powers under the Taft-Hartley Act to restore port operations and facilitate negotiations.

“The Biden-Harris Administration needs to put the good of economy and the country over politics and step in immediately to help resolve this potentially devastating crisis,” they said in a joint statement. “Every day of delay will cost the economy billions of dollars, and it will only be a matter of days before the resulting cargo backlogs will being impacting consumers and the upcoming holiday season.

In a video statement earlier this month, however, Daggett said invoking Taft-Hartley wouldn’t be effective, as workers would simply slow down operations. “You’re better off sitting down, getting a contract, and letting us move on with this world,” he stated. “In today’s world, I’ll cripple you. I will cripple you.”

National Retail Federation (NRF) President and CEO Matthew Shay has urged President Biden to use all available tools, including the Taft-Hartley Act, to restore port operations and resume negotiations.

“A disruption of this scale during this pivotal moment in our nation’s economic recovery will have devastating consequences for American workers, their families and local communities,” Shay said, warning of inflationary pressures and impacts on the recovery from Hurricane Helene.

White House Calls for Collective Bargaining

President Biden issued a statement urging USMX to negotiate fairly with the International Longshoremen’s Association workers, in which he emphasized the importance of collective bargaining and fair compensation, especially given the record profits made by ocean carriers since the pandemic.

“It’s only fair that workers, who put themselves at risk during the pandemic to keep ports open, see a meaningful increase in their wages as well,” Biden said.

“It is time for USMX to negotiate a fair contract with the longshoremen that reflects the substantial contribution they’ve been making to our economic comeback,” the statement concluded.

Detention and Demurrage

In the lead up to the strike, the Federal Maritime Commission (FMC) issued a reminder to regulated entities about their ongoing obligations during the port strike.

“Beyond the general reminder, the Industry Advisory highlights and summarizes the FMC’s efforts related to detention and demurrage, including the 2020 interpretive rule and more recently adopted regulations on detention and demurrage billing practices, and invites industry members to actively participate in ensuring compliance by reporting unlawful actions or filing a complaint,” said Carrol Hand, a maritime and international trade attorney at law firm Holland & Knight.

The Commission’s Bureau of Enforcement, Investigations, and Compliance will investigate any reports of unlawful conduct and prosecute violators to the fullest extent of the law.

U.S. Imports Surging

The strike coincides with a particularly busy period for U.S. imports, which have been surging this year on the back on a strong U.S. economy. Notably, the first half of 2024 saw a substantial surge in import volumes, reaching 12.1 million twenty-foot equivalent units (TEUs)—a 14.8% increase compared to the same period in 2023.

According to the NRF’s Global Port Tracker, September’s forecast stands at 2.31 million TEUs—a 14% year-over-year increase—while October is projected at 2.08 million TEUs, up 1.3%. Should forecasts prove accurate, 2024 will experience a seven-month stretch of import levels at or above 2 million TEUs—the longest such period since the 19-month, pandemic-fueled run through September 2022.

Vessels Arriving

According to Project44, more than 100 vessels are estimated to arrive at these ports this week, so impacts will start immediately.

However, Flexport does not expect significant cargo diversions to the West Coast, at least in the short term. Vessels bound for East Coast ports are likely to remain anchored offshore along the East and Gulf Coasts rather than divert elsewhere, as such diversions are not economically viable. 

“The only diversions we have seen—and should continue to see in the short term—are along the East Coast, as shipping companies are omitting certain port calls, or dropping cargo in-transit until the East Coast reopens, as some shipping companies have started to do in Central America ports,” Flexport said.