"The last major longshore workers strike on the East Coast was in 1977. In the nearly half century since the nation's Atlantic and Gulf ports have been quiet. This has given such retailers as Home Depot, Amazon, Target and IKEA the confidence to redirect sizable volumes of merchandise shipped in containers from the West Coast, a hotbed of labor activism, through Savannah, Ga., Charleston, S.C., Norfolk, Va., and New York.
That may soon be over. The labor peace that has been a foundation of East Coast supply chains is now under threat. The president of the East and Gulf Coast dockworkers union, the International Longshoremen's Association, told members on Nov. 4 to stash away money in preparation "for the possibility of a coast-wide strike." He declared the union will refuse to extend its current contract with ocean carriers, which expires on Sept. 30, 2024.
Dockworkers want to claim a share of the record profits earned during the pandemic. International Longshoremen's Association president Harold Daggett said he expects ocean carriers to "deliver a landmark compensation package." Container lines, however, are experiencing a plunge in freight rates. They are now barely in profit-making territory. A.P. Moller-Maersk, the world's second largest container line, reported on Nov. 3 a third-quarter profit plunge of 94% and said it would lay off 10,000 employees.
West Coast dockworkers, represented by a rival union, received a 32% wage increase in addition to a one-time $70 million bonus for working through the pandemic. The Journal of Commerce reported that the East Coast union, believing the Biden administration was insufficiently supportive of those dockworkers, plans to meet with Donald Trump about potentially supporting his candidacy.
The other destabilizing issue hanging over the East and Gulf Coast negotiation is the union's longstanding desire to represent nonunionized container port dockworkers at South Atlantic ports. To accomplish this feat, they would have to undo a system that dates to the beginning of container shipping in the 1950s. The union saw an opening in 2021, when a $1 billion container facility was opened at Charleston, the first new container terminal in the U.S. in more than a decade. Citing a clause in its collective-bargaining agreement that opens the door for it to represent workers at any newly opened Southeastern facility, the union sued two ocean carriers for $300 million. That prompted the carriers to divert ships from the new terminal and led to a countersuit by South Carolina.
The union won the case on appeal. South Carolina has petitioned the Supreme Court to review that decision. But there remains the likelihood the issue could complicate the negotiations ahead of the union's strike deadline next September. The contract language regarding the union's right to represent historically nonunion labor is vague, but the union is on record stating that one of its goals for the negotiations is to ensure full control of the East Coast longshore workforce. Which would mean dominance over U.S. supply chains.
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Mr. Tirschwell is vice president of global intelligence and analytics at S&P Global Market Intelligence and chairman of the TPM shipping conference." [1]
1.Unions Go After East Coast Ports. Tirschwell, Peter. Wall Street Journal, Eastern edition; New York, N.Y.. 17 Nov 2023: A.15.
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