One day after dockworkers at 36 United States-based East and Gulf Coast ports, from Maine to Texas, officially walked off the job—when a deal between the International Longshoremen’s Association (ILA) and the United States Maritime Alliance (USMX) could not be struck by 12:01 AM ET on October 1—the National Retail Federation (NRF), in conjunction with more than 270 trade associations representing manufacturers, farmers and agribusinesses, wholesalers, retailers, restaurants, importers, exporters, distributors, transportation and logistics providers, and other supply chain stakeholders, penned a letter to President Biden, calling for the White House to intervene in an effort to bring the strike to an end.
Copied on the letter were various White House Cabinet members and officials, including: Copied on the letter were various White House Cabinet members and officials, including:
Julie Su, Acting Secretary, Department of Labor; Pete Buttigieg, Secretary, Department of Transportation; Gina Raimondo, Secretary, Department of Commerce; Tom Vilsack, Secretary, Department of Agriculture; Alejandro Mayorkas, Secretary, Department of Homeland Security; and Lael Brainard, Director, National Economic Council; and Members of Congress.
“We are calling upon you and the administration to immediately use your authorities to end the strike, which has shut down all East Coast and Gulf Coast container ports,” the letter stated. “Given the dire situation and the massive negative ramifications for our industries and the economy, we implore you to take immediate action to resolve this situation expeditiously.”
The letter further explained that the strike has become “an issue of national and economic security,” which will cost the economy billions of dollars per day while impacting businesses of all sizes—not party to the negotiations—yet reliant on the free flow of imported and exported goods through the East and Gulf Coast ports.
“These port closures mean that our farmers are unable to sell their crops to overseas markets, manufacturers are unable to receive critical components for their manufacturing facilities, retailers won’t be able to get their holiday merchandise in time, and many other industries will be negatively impacted,” the letter stated. “The longer a strike occurs, the more severe the economic impact, and the longer it will take to recover.”
In closing, the associations argued for a collective bargaining process between the ILA and USMX in order to reach a deal before the expiration of the contract earlier this week. The letter stated that the White House must become directly involved—not only to reopen the ports, but also to work with the ILA and USMX to reach a new deal and resolve the outstanding contract issues, with the help of a federal mediator to ensure good-faith bargaining.
Before the ports went on strike this week, the NRF had already called on President Biden to use any and all available authority and tools—including the Taft-Hartley Act—to immediately restore operations at all impacted container ports, bring the parties back to the negotiating table, and ensure there are no further disruptions.
However, regarding the potential invocation of the Taft-Hartley Act, which allows the President to seek a court injunction triggering a back-to-work order and an 80-day cooling-off period if a strike of essential workers affects national security, The Conference Board noted that election-year politics makes it a more complex decision.
“The Administration has stated it has no plans to invoke Taft-Hartley, due to its support of unions and collective bargaining,” the organization said. “Since the 1970s, it has been used only once to end a work stoppage (a 2002 lockout at 29 West Coast ports).”
Data from The Conference Board showed that the 36 East and Gulf Coast ports handle 57% of U.S. container volume, with those ports—whose leading types of cargo include electronics and automobiles—handling around a quarter of U.S. annual international trade, valued at approximately $3 trillion. The Board also noted that a one-week strike could cost the economy $3.78 billion and increase the cost of consumer goods, further putting pressure on inflation.
In the days leading up to the strike, USMX said it had exchanged counteroffers related to wages with the ILA.
“The USMX increased our offer and has also requested an extension of the current Master Contract, now that both sides have moved off their previous positions,” the group said. “We are hopeful that this could allow us to fully resume collective bargaining around the other outstanding issues in an effort to reach an agreement. Our offer would increase wages by nearly 50 percent, triple employer contributions to employee retirement plans, strengthen our health care options, and retain the current language around automation and semi-automation.”
ILA officials countered, stating that they rejected this offer, noting it fell far short of what ILA rank-and-file members demand in wages and protections against automation.
“USMX brought on this strike when they decided to hold firm to foreign-owned ocean carriers earning billion-dollar profits at U.S. ports but not compensating the American ILA longshore workers who perform the labor that brings them their wealth,” said Harold Daggett, President of the 85,000-member ILA union. “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. USMX owns this strike now. They must meet our demands for it to end.”
Jon Monroe, president and founder of Jon Monroe Consulting, told LM that the main issue for the ILA is it feels its workers are losing their jobs to automation and wages with the two sides almost 40% apart. While the ILA’s Daggett is very much against automation and wants gates to be manned by the union labor, Monroe said the reality is that the whole world is going to automation.
“We are behind Rotterdam, Shanghai, almost every Asian port, because they’re much better equipped and faster to automate,” he said. “I know one of the things that he wants to do is develop a type of global union force and get everybody on board. But I don’t think he understands how Asia works. There is China, which is still the biggest manufacturing base in the world, and the president of China controls that with an iron fist. There’s no way that Harold Daggett is going to go in and organize China labor or in Vietnam or anywhere.”
Now that a strike is underway, Monroe said there are three potential options for how things progress from here.
Option one is the USMX gives the ILA what it wants within 24-to-72 hours. Option two is that the ILA capitulates and gives them what they want within 24-to-72 hours, and number three is the strike itself.
“The question is, how long does it last,” he said. “I’m betting seven-to-10 days. The Biden administration does not want to invoke Taft-Hartley, but this is going to hit the economy pretty hard.”
