Port?workers strike across the East and Gulf Coasts

Our live coverage has ended. Follow the?port strike story here or read through the posts below.

An exterior view of the Department of Transportation building in Washington, DC, on August 25.

The US Department of Transportation on Tuesday said the administration is “closely monitoring any attempts by companies to opportunistically raise prices, including ocean shippers or others, during the labor dispute at East Coast and Gulf Coast ports,” in a statement from Secretary Pete Buttigieg.

“Our administration is calling on ocean carriers to withdraw their surcharges. No one should exploit a disruption for profit, especially at a time when whole regions of the country are recovering from Hurricane Helene,” the statement reads. “We are closely monitoring potential supply chain impacts and assessing ways to address potential impacts, if necessary.”

The US Maritime Alliance, known as USMX, which represents shipping companies and port authorities, said Tuesday afternoon in its first public comments since the strike that it was proud of its offer to the union.

“USMX is proud of the wages and benefits we offer to our 25,000 ILA employees, and strongly supports a collective bargaining process that allows us to fully bargain wages, benefits, technology, and ensures the safety of our workers, day-in and day-out,” the group said in a statement. “We have demonstrated a commitment to doing our part to end the completely avoidable ILA strike. Our current offer of a nearly 50% wage increase exceeds every other recent union settlement, while addressing inflation, and recognizing the ILA’s hard work to keep the global economy running.”

The group said it wants the union, which has not met USMX at the bargaining table in months, to clear a path for a return to face-to-face negotiations.

Dockworkers strike at the Bayport Container Terminal in Seabrook, Texas, on October 1.

The US economy is chugging along, the labor market is holding its own and inflation has slowed to just above the Federal Reserve’s 2% target.

The dockworkers strike could muck up some of that progress, economists say.

Economic growth: Work stoppages at ports that handle nearly 35% of all US imports and exports could cause a drag of $4.5 billion to $7.5 billion on US Gross Domestic Product growth for each week they’re in effect, according to an Oxford Economics analysis released last week.

Jobs: The strike involves about 45,000 port workers, but the ripple effects in supporting industries could mean up to 105,000 workers could find themselves temporarily out of work if the strike is prolonged, according to the report.

Those job losses, coupled with the Boeing machinists’ strike and the effects of Hurricane Helene, could massively distort the October jobs report (released on November 1) at a time when the Fed is heavily scrutinizing employment data for signs of a weakening labor market, Ryan Sweet, chief US economist at Oxford Economics, told CNN Tuesday.

Still, the port workers strike isn’t expected to derail the economy, which is growing at a 3% clip, Joe Brusuelas, RSM US chief economist, wrote Tuesday.

“Because West Coast ports can absorb much of the redirected economic activity, the impact on the economy and inflation will be modest at best in the short term,” he wrote.

The National Association of Manufacturers said it is concerned about the port strike and is calling on congressional leaders to act to end the strike if President Joe Biden doesn’t.

“We ask that you join manufacturers in calling on President Biden to intervene,” said Jay Timmons, CEO of the NAM in an open letter. “And should the impasse continue, we ask that you consider further actions to bring about a swift resolution.”

Biden can end the strike with a stroke of a pen, but so far he has resisted calls to invoke his power to call dock workers back to the job. It’s not clear that Congress has the ability to call workers back – it would have to pass a law, which Biden would have to sign, or it would have to override a Biden veto. That sounds like a tall task.

Longshoremen with the International Longshoremen’s Association (ILA) and their supporters picket outside of the Dundalk Marine Terminal at the Port of Baltimore on October 1 in Baltimore, Maryland.

The International Longshoremen’s Association union said it will stay on the picket lines until its demands are met.

“The ILA?intends for the demonstrations to continue round the clock, 24/7, for as long as it takes for United States Maritime Alliance to meet the demands of ILA rank-and-file members,” the ILA said in a statement.

The union said it demands a $5 an hour increase in pay in each of the six years over the course of the next contract. It also wants “airtight” language that the ports will introduce no automation “or semi-automation,” and it wants all royalties for the containers to go to workers.

Dockworkers strike in a picket line outside of the Port of Houston Authority today in Houston, Texas. Members of the International Longshoreman's Association have begun a nationwide strike, consisting of more than 50,000 workers at ports along the East Coast and Texas. The strike, affecting 36 ports, marks a historic event and is the first by the union since 1977. The strike comes after negotiations between the International Longshoreman's Association and the United States Maritime Alliance failed to reach an agreement on better wages and automation.

President Joe Biden issued a strong call for to International Longshoremen’s Association and a consortium of companies managing ports along the East and Gulf coasts to reach an agreement and get workers back on the job after a strike began at midnight Tuesday.

Biden pointed to impacts from Hurricane Helene among the critical reasons to resolve the matter.

“As our nation climbs out of the aftermath of Hurricane Helene, dockworkers will play an essential role in getting communities the resources they need. Now is not the time for ocean carriers to refuse to negotiate a fair wage for these essential workers while raking in record profits,” he said, warning that his administration “will be monitoring for any price gouging activity that benefits foreign ocean carriers.”

However, the strike will not delay the vast majority of supplies getting to hurricane victims, because few if any relief supplies would be arriving in the hurricane-battered Southeast via ship.

He called on USMX “to come to the table and present a fair offer” and “to negotiate a fair contract with the longshoremen that reflects the substantial contribution they’ve been making to our economic comeback.”

The Biden administration is now confronting the complicated politics and limited toolkit of the stoppage in the home stretch of the critical election season.

Cabinet officials have been keeping close tabs on the negotiations, with White House officials meeting with representatives from the US Maritime Corporation on Friday.

A container ship sits in the New York Harbor as the Port of Newark is closed after members of the International Longshoremen’s Association, or ILA, began walking off the job on October 1 in Elizabeth, New Jersey. The strike of over 50,000 workers at ports along the East Coast and Texas comes after the just-expired master contract with the United States Maritime Alliance, or USMX. Workers are striking over wages, technology and other issues.

The port workers strike could carry “profound and multifaceted” implications for a US supply chain that’s ran at a much smoother clip since being dislodged during the pandemic.

“The longer the strike, the higher the disruption that we are going to experience in the supply chain and the ripple effects throughout the economy,” said Amir Mousavian, professor of supply chain management in the College of Business at the University of New England.

While the severity of the supply chain delays and economic impacts depend on the strike’s duration, some effects will be felt immediately, particularly on perishable fresh and frozen foods, he said.

Products with a longer shelf-life, however, may not see immediate shortages. The strike notice was issued 60 days ago, giving manufacturers and retailers ample opportunity to bolster their “safety stocks” in preparation of a strike.

“However, if the strike is going to go on for a longer period of time, it doesn’t matter how much preparation you did in the past 60 days or how much safety stock you have, you’re going to run out of product,” he said.

In addition to potential empty shelves and delayed production timelines, a prolonged strike could push shipping costs higher, which in turn would put upward pressure on prices at a time when the Federal Reserve appeared to have successfully reined in high inflation, he added.

“Our supply chain in the United States is very efficient, but not resilient,” he said.

Workers take part in a port strike at Port Newark today in Bayonne, N.J.

The last time the International Longshoremen’s Association went on strike in 1977, it won an 80 cent an hour raise. That works out to about $4 an hour in today’s dollars. ILA President Harold Daggett indicated Tuesday that the union might have accepted an increase like that without going on strike.

Daggett said Tuesday morning that the Biden administration had urged the two sides to accept a $4 an hour increase per year, in an effort to avert a strike.

“We thought about it,” Daggett said. But he said the United States Maritime Alliance, which is the management group representing ship lines, terminal operators and ports and operates under the acronym USMX, balked at that, and would only agree to raises totaling $18 an hour during the life of the contract, or about a $3 an hour per year.

Daggett said he rejected that offer, using colorful language to describe that rejection.

The union had been demanding a $5 an hour increase each year of a six-year deal, which would have raised top hourly pay from $39 to $69 an hour. Daggett said management “can afford easily” a raise of $5 an hour, given the record profits they’ve been earning in recent years.

The USMX did not immediately respond to Daggett’s comments Tuesday.

Striking longshoreman picket with a flag outside the Packer Avenue Marine Terminal Port on Tuesday in Philadelphia.

For weeks, Cabinet-level officials across an array of agencies have been keeping close tabs on the negotiations between the?International Longshoremen’s Association and a consortium of companies managing ports along the East and Gulf coasts. White House officials on Friday met with representatives from the?consortium, the US Maritime Corporation, to encourage the association to stay at the negotiating table.

When it comes to brokering a potential deal, labor experts say the White House has just two tools: Using the bully pulpit and invoking the Taft-Hartley Act,?which would force the longshore workers to get back on the job.

Breaking the strike would be a politically dangerous move for Biden as his vice president, Kamala Harris, runs to succeed him in the Oval Office. Without taking that move, there’s not much else the White House can do.

Labor leaders have said that the mere suggestion of government intervention would benefit employers, not workers.

“History tells us that when companies can count on an injunction against a strike, they do not negotiate in good faith to reach an agreement,” AFL-CIO President Liz Shuler wrote in response to the House GOP letter.

Dockworkers strike outside of the Port of Newark after members of the International Longshoremen’s Association, or ILA, began walking off the job after 12:01 a.m. ET on October 1 in Elizabeth, New Jersey. The strike of over 50,000 workers at ports along the East Coast and Texas comes after the just-expired master contract with the United States Maritime Alliance, or USMX. Workers are striking over wages, technology, and other issues.

Striking dock workers see themselves as essential employees to keep America’s economy humming. That’s why they feel they’re owed more than the port authorities and shipping companies are offering in their new contract.

“What we do here, we, we move the world, everything that’s in your home,” Tyreke Wells, a longshore worker at the Port of New York and New Jersey told CNN Tuesday. “Your furniture, your clothes, everything that goes to Walmart, everything going to Lowe’s, Target, the grocery store, all that seafood.”

Wells said the port workers deserve a better deal.

“People at home need to know that we’re not greedy,” he said. “We’re just working people. Blue-collar people that work a lot of hours to maintain that everything they need they get – and we wanna make sure we get what we need.”

Tyreke Wells speaks to CNN's Vanessa Yurkevich on October 1 in Elizabeth, New Jersey.

Tyreke Wells, one of the nearly 50,000 members of the International Longshoremen’s Association currently on strike, told CNN Tuesday that longshoremen continued to work to docks during the pandemic to make sure the country had the medical supplies it needed. Now the union is looking for a raise in return for their life-saving and tireless work.

Wells said longshore workers sacrificed when most of America was locked down.

“The longshoreman, we worked these docks, these docks, night and day, night and day nonstop,” he said. “But we did everything we can. All our members went to work and we sacrificed.”

Wells said the workers are fighting for better wages.

“We want better health care, better pension money and better annuity,” Wells said. “And we wanna keep out the automation because once you start the automation and the semi automation, you eliminate jobs.”

Longshore workers at the port of Baltimore grew violent shortly after they went on strike in the early hours of Tuesday morning when a dump truck driver tried to enter the port, the International Longshoremen’s Association confirmed.

“Last night some guy in Baltimore in a dump truck tried to run over the pickets,” said Harold Daggett at a mid-morning rally Tuesday at the port of New York and New Jersey.

“Well, he wished he didn’t do that because they ripped him out of the truck,” Daggett said. He appeared ready to speak more on the incident before stopping. When the crowd began laughing, Daggett said, “Alright, I won’t say any more.”

In an interview with Fox 5 in Washington, the driver said he was instructed by police to collect the garbage despite the picket line. He said the longshore workers broke his windshield and lacerated his face.

Cranes and shipping containers are seen at Port Jersey with the New York City skyline in the background during a port strike on October 1 in Bayonne, New Jersey.

Despite a wide gap in negotiations between the union and the shipping companies, Bank of America predicts that the port strike will last no more than a few weeks, at most. The bank’s analysts believe President Joe Biden will intervene and end the strike by invoking the Taft-Hartley act.

“Our base case is a port strike lasting no more than a few days or weeks before the Ta?t-Hartley Act is invoked to reopen the ports,” the bank wrote in a note to clients. “We see Biden needing to balance the need to appear pro-labor and supporting the workers in their negotiations, but also the need to keep an eye on supply chains and economy which could be disrupted by prolonged port strikes.”

But the Biden administration hasn’t sounded too keen thus far on invoking Taft-Hartley just yet, with President Biden saying “I don’t believe in Taft-Hartley.”

And workers can still slow the pace at the ports to a crawl, even if they are officially back at work.

Dockworkers at the Maher Terminals in Port Newark are on strike on October 1 in New Jersey.

It takes a lot fewer jobs to move cargo across docks than it used to. The International Longshoremen’s Association, which went on strike at East and Gulf Coast ports early Tuesday, say saving jobs from future automation advances is a key issue in the strike.

Some other ports around the world use greater automation to track and move cargo than at US ports. The ILA said that if it doesn’t draw the line on greater use of automation, that it will cost members their jobs and the pay rate won’t matter.

“The rest of the world is looking down on us because we’re fighting automation,” said Dennis Daggett, the ILA’s executive vice president and son of union president Harold Daggett, in remarks on the picket line outside the Port of New York and New Jersey Tuesday morning. “Remember that this industry, this union has always adapted to innovation. But we will never adapt to robots taking our jobs. Robots don’t pay taxes. Robots don’t serve the community. Robots don’t spend money in the community. But guess who does? The ILA.”

The United States Maritime Alliance, the management group that operates under the acronym USMX, said it is offering to keep the contract language on the use of automation unchanged, but the union said that’s not enough. Face-to-face talks broke down in June after the union charged a small port in Gulfport, Mississippi, had used automation to check and let in trucks without union workers, which the union argued violated its labor contract.

But Harold Daggett said in an interview on the picket line that the USMX does want fully automated terminals and that the union needs better protections against introduction of technology.

“They’re making billions and billions of dollars,” he said. “They don’t want to share it. They’d rather see a fully automated terminal right here on the East Coast so they can make more money. They’re money crazy… But they want to get rid of our jobs out of the United States. So that’s why we’re all fighting here.”

A large oak lies on a home after it fell due to Tropical Storm Helene in Anderson, South Carolina, on September 27.

Some of those urging government action to block or quickly end a strike say the recent damage caused by Hurricane Helene is another reason not to have ports shut down by a strike.

On Monday, ahead of the walk-out, Senator Tim Scott of South Carolina, citing the hurricane damage, asked the ILA to take that into consideration and delay any walkout. So did Matthew Shay, CEO of the National Retail Federation.

“Particularly with what’s happening in the Southeast with the hurricane, the worst possible time to shut these ports on the East Coast (is) when these people are in dire circumstances and need relief,” he told CNN Monday.

But few if any relief supplies would be arriving in the hurricane-battered Southeast via ship.

The only cargo ships that call on the East or Gulf Coast ports are bringing goods from other countries, not from other US cities Under US maritime law, those ships, owned and operated by foreign carriers, are prohibited by law from moving goods between two different US cities. There are limited US flag ships which move military cargo or goods between the mainland and US territories such as Puerto Rico or the US Virgin Islands.

A ship is also a much slower way to move goods to the affected areas than truck or rail.

A dockworker strikes outside of the Port of Houston Authority today in Houston, Texas.

There are numerous ways the workers can slow the flow of freight while strictly following rules in the current contract. In a video posted in early September, ILA President Harold Daggett said if members were forced back to work, they would likely only move a small fraction of their normal cargo volumes.

“Do you think when (members)?go back to work, that those men are going to go to work on that pier?” he said on the video message. “It’s going to cost the companies money to pay their salaries, while it goes from 30 moves an hour to maybe eight.”

The shipping lines realize the problem with having Biden order the union back to work, said Peter Tirschwell, vice president of global intelligence and analytics at S&P Global Market Intelligence and chairman of the TPM shipping conference.

“A senior ocean carrier guy told me yesterday, ‘If they are forced back to work, they can make life miserable for everybody,’” he told CNN last week.

A view of closed entrance to the Maher Terminal, as members of the International Longshoremen’s Association union, which represents roughly 45,000 workers, strike in Elizabeth, New Jersey, on October 1.

Stuck on the sidelines and watching with great concern are businesses that depend on the movement of goods.

More than 200 business groups sent a letter to the White House last week asking the Biden administration to step in to prevent a strike, saying the country relies on moving both imports and exports through these ports.

“The last thing the supply chain, companies and employees… need is a strike or other disruptions because of an ongoing labor negotiation,” read the letter.

The US Chamber of Commerce sent a follow-up letter Monday urging President Joe Biden to exercise powers under what is known as the Taft-Hartley Act, which became law in 1947, to keep the ports open and longshore workers on the job. President George W. Bush applied the act in 2002 to?halt an 11-day lockout?of union members at West Coast ports.

But Biden told reporters Sunday he has no intention of using the powers he has under Taft-Hartley.

“No,” Biden said. “Because it’s collective bargaining, and I don’t believe in Taft-Hartley.”

A ship carries shipping containers through Upper Bay in New York on September 30.

There are also disputes between the union and management about the use of automation in the ports, which the union said would cost some members their jobs. The USMX said it is offering to keep the same contract language on use of automation in place.

“They have language in there now that’s not strong enough,” ILA President Harold Daggett told CNN. “Because what happens is they come in with new technology… and that means the trucks are coming in and they’re already checked in somewhere else and not using the checkers in the ILA.”

Absent stronger language preventing certain automation at the ports, Daggett said he won’t return to the negotiating table.

“It’s not fair,” Daggett said. “And if we don’t put our foot down now, they would like to run over us, and we’re not going to allow that.”

Longshoremen strike at midnight at Bayport Terminal on October 1 in Houston, Texas.

The USMX, which declined to comment Tuesday, has complained the union is not negotiating in good faith, saying the two sides haven’t met in person since June. The USMX said Monday it had increased its offer to wage increases of?more than 50% over the proposed six-year contract. ILA President Harold Daggett on Wednesday told CNN the union is seeking a $5-an-hour pay increase each year over six years, with top pay climbing from $39 an hour to $69. That would equate to a 77%?pay hike?over the life of the contract.

Shipping rates soared during and immediately after the pandemic, as supply chains snarled and demand surged. Industry profits topped $400 billion from 2020 to 2023, which is believed to be more than the industry had previously made in total since containerization started in 1957, according to analyst John McCown.

“Since Covid, they’re making billions and billions of dollars,” ILA President Harold Daggett told CNN. “But they don’t want to share it. They’d rather see a fully automated terminal right here on the East Coast so they can make more money.”

The union says it has continued to talk with the USMX, just not in face-to-face negotiations. Ahead of the strike, it said management knows what it is demanding in order to get a deal done and that any strike would be management’s fault, not the union’s. It said its demands are reasonable given the level of profits in the shipping industry.

Daggett praised the Biden administration’s efforts, in particular Acting Secretary of Labor Julie Su, whom he called “terrific.” “She’s knocking down doors. She’s trying to stop this. She’s trying to get us… fair negotiations,” Daggett said. “It’s the companies that don’t want to sit here and be fair. So that’s why we’re out here fighting for our livelihood.”

A dockworker demonstrates after a shipping port strike went into effect across the East Coast at the Port of Wilmington, Delaware, on October 1.

Port Wilmington in Delaware describes itself as the nation’s leading banana port, bringing in a large share of America’s favorite fruit. According to the American Farm Bureau, 1.2 million metric tons of bananas come in through the struck ports, representing about one quarter of the nation’s bananas.

Other perishable items, such as cherries, also move through the ports, as do a large percentage of imported wine, beer and hard liquor. Raw materials used by US food producers, such as cocoa and sugar, make up a large portion of the affected imports as well.

And many non-perishable goods, such as furniture and appliances, are imported through the affected ports, too. Retailers have been rushing in recent months to get the imported products they expect to sell during the holiday season delivered to them before the October 1 strike deadline.

Many of the goods cannot be rerouted because it doesn’t make economic — or logistical — sense to ship them by plane or to other ports of entry.

Cranes and shipping containers are seen at Port Newark during a port strike, on Tuesday, October 1 in Bayonne, New Jersey.

Depending on the length of the strike, it?could result in shortages of consumer and industrial goods, which could then lead to price hikes. It could also mark a setback for the economy, which has shown signs of recovery from pandemic-induced supply chain disruptions that resulted in a spike in inflation.

The ports involved include the Port of New York and New Jersey, the nation’s third-largest port by volume of cargo handled. It also includes ports with other specialties.

“If we have to be out here a month or two months, this world will collapse,” said ILA President Harold Daggett in an interview with CNN Tuesday morning. “Go blame them. Don’t blame me, blame them.”

Longshoremen chant as they circle the entrance at Bayport Terminal on Tuesday, Oct. 1, 2024, in Houston.

Nearly 50,000 members of the International Longshoremen’s Association (ILA) are?on strike?Tuesday against the nation’s East and Gulf Coast?ports, choking off the flow of many of the nation’s imports and exports in what could become America’s most disruptive work stoppage in decades.

The strike, which was confirmed by the?Port?Authority of New York and New Jersey as well as the?Port?of Virginia, began at midnight. There appears to be a wide gap between the union’s demands and the offer of the?United States Maritime Alliance, which uses the acronym USMX. The maritime alliance?represents the major shipping lines, all of which are foreign owned; as well as terminal operators and?port?authorities.

The strike will?stop the flow of a wide variety of goods over the docks of almost all cargo?ports from Maine to Texas. This includes everything from bananas to European beer, wine and liquor, along with furniture, clothing, household goods and European autos, as well as parts needed to keep US factories operating and American workers in those plants on the job. It could also stop US exports now flowing through those?ports, hurting sales for American companies.

Depending on the length of the strike, it?could result in shortages of consumer and industrial goods, which could then lead to price hikes. It could also mark a setback to the economy, which has shown signs of recovery from pandemic-induced supply chain disruptions that resulted in a spike in inflation.

While union says there are about 50,000 members covered by the contract, the USMX puts the number of port jobs closer to 25,000, with not enough jobs for all the workers in the union to work every day.

The?ports involved include the?Port?of New York and New Jersey, the nation’s third-largest?port?by volume of cargo handled. It also includes?ports with other specialties.