On day three of a massive dockworkers’ strike that was resulting in runs at supermarkets on consumer goods like toilet paper, the International Longshoremen’s Association (ILA) and the United States Maritime Alliance (USMX) announced a tentative agreement had been reached and work would resume in ports from Maine to Texas.
On Thursday evening, the ILA and the U.S. Maritime Alliance released a joint statement, announcing that the striking dockworkers and their employers “have reached a tentative agreement on wages and have agreed to extend the Master Contract until January 15, 2025 to return to the bargaining table to negotiate all other outstanding issues. Effective immediately, all current job actions will cease and all work covered by the Master Contract will resume.”
In a statement posted on X Thursday, President Joe Biden said, “I applaud the International Longshoremen’s Association and the United States Maritime Alliance for coming together to reopen the East Coast and Gulf ports and ensure the availability of critical supplies for Hurricane Helene recovery and rebuilding. Collective bargaining works.”
Thursday evening, the Port of Virginia posted on its website that it was “in the process of bringing our terminals back online in an orderly and safe manner,” which will take about 24 hours, officials estimate. The first reservation for motor carrier pickup will be available 24 hours after union workers return to work, and “as a result, motor carriers are encouraged to plan for longer-than-usual queue times and waits. We appreciate the patience of our customers and partners throughout this process.”
Rachel Shames, vice president of pricing and procurement for Norfolk-based logistics and trade compliance company CV International, said in an interview Tuesday that if the strike lasted “only a couple of days, we’ll avoid the worst of potential disruption.”
She noted that “May and June were very, very heavy shipping months, which was surprising, but it was really all because shippers were trying to get ahead of the situation. Some shippers are in better positions than others.”
Also, Shames said, “Since COVID, in particular, it’s been cycles of unpredictability. Basically, there’s not really a normal anymore in international shipping. It’s very volatile. So, in one sense, I think this is just another roadblock.”
Speaking Friday morning, after the strike’s suspension, Shames noted that although the wage dispute appears to be settled, “automation is the remaining sticking point.” However, “everybody’s excited we’ve got a few months of breathing room now,” she said. Moving forward, Shames expects about “two or three weeks of digging out” of the backlogged shipments, and some shippers could try to load more cargo in coming weeks before January 2025, when the temporary agreement ends.
“There’s hardly a ‘normal’ anymore,” Shames said. “That’s the shipping world — disruption.”
According to reports from The New York Times and The Wall Street Journal, port employers have offered the union dockworkers a 62% increase in wages over the six-year period of their next contract.
On Monday ahead of the strike, the ILA had been seeking a 61.5% pay increase. The USMX, which represents shipping employers such as Maersk’s APM Terminals, had previously proposed a 50% rise in wages, tripling employer contributions to worker retirement plans, strengthened health care options and “retaining … current language around automation and semi-automation.”
About 45,000 ILA union members hit picket lines just after midnight on Tuesday at the Port of Virginia and every other major port along the East and Gulf coasts, launching the ILA’s first U.S. port strike since 1977. The strike had sparked fears of long-term supply chain disruptions and added stress to the national economy in the month leading up to the 2024 presidential election.
During the contract extension period, the union and the USMX will continue negotiating the terms of the master contract, including previous sticking points such as overtime and ports automation.
In a statement Tuesday, ILA President Harold Daggett said that the union wants “absolute airtight language that there will be no automation or semi-automation.” In July, Daggett had posted on the union’s website that he had met with former President Donald Trump, who “promised to support the ILA in its opposition to automated terminals in the U.S.”
Two major East Coast ports — the Port of Virginia and the Port of New York and New Jersey — have semi-automated terminals. Labeled by National Review in 2022 as “America’s Most Automated Port,” the Port of Virginia has more than 90 semi-automated stacking cranes, many of which were installed nearly a decade ago.
The union dockworkers’ previous master contract had stated, “There shall be no implementation of semi-automated equipment or technology/automation until both parties agree to workforce protections and staffing levels.”
Virginia Business Deputy Editor Kate Andrews contributed to this article.
Thousands of ILA members joined the picket line as a midnight deadline passed Monday evening — with no deal reached between ILA and the United States Maritime Alliance (USMX), which represents the ports. The union is calling for a significant wage increase as well as assurances on automation at the port.
ILA President Harold Daggett joined members on the picket lines at Maher Terminal in Port Elizabeth and APM Terminals and Port Newark Contain Terminal Tuesday. The union says it intends for demonstrations to continue round-the-clock for as long as it takes for USMX to meet its demands for rank-and-file members.
“We are now demanding $5 an hour increase in wages for each of the six years of a new ILA-USMX Master Contract,” said Daggett. “Plus, we want absolute airtight language that there will be no automation or semi-automation, and we are demanding all Container Royalty monies go to the ILA.”
Opposing sides
Thousands of members joined in solidarity on picket lines at all the major ports on the Atlantic and Gulf Coasts. In a show of international solidarity, Bobby Olvera Jr., president, International Longshore and Warehouse Union, appeared with with Daggett and ILA Executive Vice President Dennis Daggett when the strike commenced overnight.
“When we fight, we win,” said Olvera. “Brother and Sisters, on behalf of all the members of the ILWU, from Alaska to San Diego, British Columbia, and most definitely from the Islands of Hawaii, the ILWU stand with ILA. We are family – WE ARE ONE!”
Meanwhile, USMX stood by its most recent offer and expressed a desire to continue bargaining.
“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,” USMX said in a statement updating the status of the negotiations on Oct. 1. “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.”
“We look forward to hearing from the Union about how we can return to the table and actually bargain – which is the only way to reach a resolution,” USMX closed its statement.
The state, region and country are bracing for the fallout, which would intensify as it drags on. As NJBIZ reported Tuesday, officials have prepared in anticipation of the shutdown.
Supply chain concerns
NJBIZ heard from sector and subject experts about the different ramifications and how they are adjusting to the disruption.
“We are in constant contact with our customers. As you would expect, many are still in the planning stages,” said Carter Andrus, chief operating officer, Prologis, a leader in logistics real estate, with facilities in New Jersey, New York, Savannah, Baltimore, and Florida. “We saw a rush to get as much product out of the port by Sept. 30, and we are working with customers to provide some overflow parking and storage areas to temporarily store inventory. Other customers are evaluating different options and will consider adjusting operations pending how the situation evolves.”
“This strike, which affects 36 ports and is the first by the union since 1977, threatens to disrupt the nation’s supply chain, potentially raising prices on various goods like food, toys and cars,” Robert Dowler, president, and Benjamin Lowe, immediate past president, said in a statement on behalf of The Association of Supply Chain Management Greater North Jersey Chapter. “The impact of the strike could be significant, potentially costing the economy up to $5 billion per day and causing delays in essential goods, especially as the holiday shopping season approaches.
The organization noted that the strike could also affect international trade and more.
“While some operations, like cruise ships and the transportation of certain fuels and essential goods, are expected to continue, the strike could lead to delays in shipments of items such as cars, fruits, and holiday merchandise, exacerbating supply chain pressures,” the statement closed.
Making plans
Kristin Pothier, KPMG US sector leader, Life Sciences, said that when it comes to the pharma industry, there are two points to consider.
“There is always a knee jerk reaction to say that any strike at a port will affect all aspects of every industry and could be very serious in life sciences especially for therapeutics,” said Pothier, before introducing the topics. “Pharma is not an industry that is heavily reliant on shipping ports. The strike is not a surprise and has been on the horizon for a couple of years. Many companies have already done the work to reroute and build stock in whatever mitigation tactic is necessary.”
She said that the pharmaceutical companies and distributors have extensive risk planning teams that kick alternative plans into gear for situations like this.
“There may be periphery items (gowns, gloves, masks etc.) that could potentially impact the health care sector which ultimately may impact the overall Pharma/Life Sciences industry,” she added.
Ash Shehata, KPMG US sector leader, Healthcare, said that since the pandemic the health care industry has been preparing for supply disruptions and conducting ongoing reviews of supply chain resiliency between distributors and health systems.
“Many of these systems were put in place during the COVID-19 pandemic. Healthcare volumes are up post-pandemic so there is little room for error,” said Shehata. “These supply disruptions will drive more visibility of the existing issues in critical major hubs like NYC, the west coast, and other major metro areas. Additionally, health systems have already experienced high medical cost inflation – second to labor inflation driving reduced margins. Supply shortages will worsen this margin impact. Supply chain disruptions could eventually impact staff and patients adversely in an already fragile environment.”
This story was originally published in NJBIZ, a BridgeTower Media publication.
RELATED STORY: U.S. port strike starts; Port of Va. stops cargo operations
About 45,000 International Longshoremen’s Association (ILA) workers walked off the job midnight Tuesday at the Port of Virginia and every other major port along the East and Gulf coasts, launching the ILA’s first U.S. port strike in 47 years. Dockworkers hit the picket lines after the union reached an impasse in contract negotiations with the United States Maritime Alliance (USMX), which represents shipping employers such as Maersk’s APM Terminals.
The port strike is the largest such action since 1977 and, depending on its length, it could cause massive disruptions to the nation’s supply chain and negatively affect the U.S. economy. Outside of Virginia, other affected ports include: Baltimore; Boston; Brunswick, Georgia; Charleston, South Carolina; Houston; Mobile, Alabama; New Orleans; New York/New Jersey; Philadelphia, Savannah, Georgia; Tampa, Florida; and Wilmington, North Carolina.
Here in Virginia, the immediate impact was felt at the Port of Virginia’s marine terminals in Hampton Roads, where no cargo is moving in or out of the port during the walkout.
According to the port, there are no cargo operations taking place at Norfolk International Terminals, Virginia International Gateway or Newport News Marine Terminal, which are currently closed. However, employees of the Virginia Port Authority and at its operating company, Virginia International Terminals, are still at work.
“Richmond Marine Terminal (RMT) and Virginia Inland Port (VIP) are operating per normal, but cargo operations there will be affected by what is happening locally. Portsmouth Marine Terminal (PMT) is operating per normal,” the port said on its website Tuesday.
“The International Longshoremen’s Union and United States Maritime Alliance must reach a fair and equitable deal as soon as possible to ensure operations can continue at the Port of Virginia and other port facilities along the East and Gulf Coasts,” U.S. Sens. Mark Warner and Tim Kaine and U.S. Rep. Bobby Scott said in a statement Tuesday. “We urge both sides to work in good faith towards a new contract, and we’ll continue to monitor this situation as it develops.”
In a letter obtained by Virginia Business that was sent last week to President Joe Biden and Vice President Kamala Harris, Virginia Gov. Glenn Youngkin had urged the Biden administration to “take all actions under your authority to bring the U.S. Maritime Alliance and the International Longshoremen’s Association to the table to reach an agreement and avert a coastwide strike.”
Youngkin issued a statement Tuesday: “Every day this strike of port workers along the East and Gulf coasts continues, the economic impacts intensify, affecting livelihoods, supply chains and prices. The economic fallout from the work stoppage at the Port of Virginia extends well beyond the commonwealth, as the port manages approximately $66 billion in essential imports, with nearly 60% destined for locations outside of Virginia. As a cornerstone of Virginia’s economy, the port supports 10% of the gross state product and supports employment for over half a million jobs in Virginia.”
The ILA and the USMX have been negotiating a new master contract to cover East Coast and Gulf Coast union workers. In Virginia, the Hampton Roads Shipping Association represents employers, while ILA Locals 970, 1248, 1624 and 1970 represent unionized workers at the Port of Virginia.
At Virginia International Gateway, Norfolk International Terminals and the Newport News Marine Terminal, picketers carried strike signs Tuesday morning and said they plan to be present 24 hours a day until the strike comes to an end.
“People say we make a lot of money, but the work we do is very dangerous,” said picketer Derrick Perry, a 19-year Port of Virginia worker and a union spokesman for ILA Local 1970, which provides maintenance and repairs at the port. “We worked during COVID to keep the country running, and a lot of our fellow workers got COVID and died. At this point, we just want to be compensated. We are out here in solidarity. This is not something we want to do, but we have to because it affects so many people.”
Virginia impact
“The Port of Virginia is one of the three pillars of the Hampton Roads economy,” Old Dominion University economics professor Vinod Agarwal said Tuesday. “If something adverse happens to the port, Hampton Roads and the commonwealth will be affected.”
The strike’s impact will increase the longer it lasts, added Agarwal, who is also deputy director of ODU’s Dragas Center for Economic Analysis and Policy. “About two-thirds of [all] cargo through Port of Virginia goes by train. Rail lines will also be impacted within a month or two. That’s when things get to be interesting, and you’ll see much more widespread impacts.”
Many businesses and workers will be affected if the strike lasts more than a week or two, and consumers will start to see empty shelves after about three months, Agarwal noted. And while many retailers purchased additional supplies in anticipation of the strike, especially with the holiday shopping season on the horizon, shortages could still occur depending on the length of the strike, he added.
Virginia exporters — including agricultural producers — also will be affected. Overseas shippers are likely to reroute shipments to West Coast ports, which are not impacted by the strike, and from there, shipments will come to the East Coast by train. “Obviously, that causes an increase in time and adds to the cost of shipments,” Agarwal said, and that could have long-term implications if shippers get used to sending their products to the West Coast and continue to do so after the strike ends.
Also impacted will be Virginia companies that import components from abroad that are assembled stateside; an example, Agarwal said, is power tools manufacturer Stihl, a German company with its U.S. headquarters and a major assembly plant in Virginia Beach. “If those companies don’t have enough supplies on hand to use in the production process, they will have to start laying off people.”
“Truckers will also be losers if the strike continues,” he added. “Their services will no longer be needed, and it will take some time to catch up with lost earnings.”
“I think everybody has anticipated it,” Virginia Trucking Association President and CEO P. Dale Bennett said Tuesday. “For the past two weeks, the prospects of getting it resolved have looked dimmer and dimmer as time went on. Truckers, their primary businesses serving the Port of Virginia, are definitely going to be impacted. They’re looking to try to do other things, haul other kinds of freight that isn’t impacted by the [strike]. That equipment sitting idle isn’t making the revenue they need to make truck payments and pay employees and take care of other expenses that don’t go away because the freight’s not there.”
For the general public, “there’s a significant amount of goods that we use that come through the ports up down the East Coast and from the Gulf Coast, and that’s all come to a standstill,” Bennett added. “It’s estimated for every day there’s a work stoppage at these ports, it will take five to seven days to recover, so do the math.”
The Port of Virginia was busy last weekend, staying open extra hours to accommodate trucks seeking to pick up containers before the strike started, according to officials with Mount Crawford’s Interchange Group, a third-party logistics company with more than 3 million square feet of warehouse space and a fleet of 90 trucks. David Bosserman, Interchange’s transportation general manager, said his company was able to get about 45 containers out of the port last weekend. Customers started calling last week, expressing concerns about getting products from the Port of Virginia’s Hampton Roads terminals, he said Tuesday.
Chris Thompson, Interchange’s vice president of business development, said that if the strike lasts a while, Interchange may pivot to other domestic trucking work not tied to the ports, including domestic shipping work on the spot market. A spot rate or spot quote is a one-time fee that a shipper pays to move a load or shipment at current freight market pricing.
“Short term, we can probably overcome a little bit of the … stoppage, but the longer this goes, the more of an impact this is going to have,” Bosserman said. “After that, we’re going to have to find alternative work.” Thompson says Interchange hopes to avoid layoffs, though.
Stihl Inc. President and CEO Chris Keffer called the Port of Virginia “crucial” to its success, “enabling us to export chainsaws and power tools from our Virginia-based manufacturing facility to over 80 countries. While we hope for a swift and mutually beneficial resolution, it’s important to note that Stihl has diversified its supplier base in recent years to mitigate the effects of short-term supply chain disruptions. We remain well-positioned with strong inventory levels both domestically and internationally to support our customers.”
Keffer said Tuesday that Stihl is making “minor adjustments to our import/export plans and closely monitoring the situation,” and that “there is no immediate impact to workers because of the strike.”
Ricardo Ungo, an assistant professor in ODU’s Department of Information Technology and Decision Sciences who specializes in supply chain research, said that consumers may start purchasing more supplies like toilet paper and paper towels than usual because of the strike — which in turn will lead to a faster decline in inventory. But so far, most Americans haven’t seen any direct impacts from the strike.
“When we talk about imports into the U.S., about 60% come by water to seaports on East and Gulf coasts,” Ungo said. “Out of that, about 75% to 80% are containers. Imports will simply get delayed. There will be costs associated with the original cost of storing items in a different part of the supply chain. It’s not that imports will disappear, but there will be delays and additional costs.”
International Longshoremen’s Association workers picket at the Port of Virginia’s terminals on Oct. 1, 2024. Photo by Mark Rhodes
A more immediate impact, Bennett noted, is due to damage from Hurricane Helene across Southwest Virginia, western North Carolina, eastern Tennessee and nearby regions. Road closures have impacted truckers, creating “a big unknown — trying to deal with the impacts of the hurricane. [The strike is] certainly going to have a detrimental impact on getting what those folks need to have. Hopefully it won’t delay their path to recovery.”
If the strike goes on very long, he added, “This is going to have a significant impact and certainly disrupt the supply chain, and that’s going to hurt. It’s going to hurt folks. We have signed onto a letter calling on the White House to do everything they can to bring the parties together and get this worked out. … There’s not a lot Congress can do about it. It’s strictly in the hands of the two parties involved under negotiations and the White House under the Taft-Hartley Act.”
Also known as the Labor Management Relations Act, the 1947 law limits unions from conducting certain kinds of actions, prohibiting jurisdictional and wildcat strikes, solidarity strikes and secondary boycotts, as well as letting the president intervene in labor disputes by calling an 80-day cooling-off period. However, Biden said Sunday that he doesn’t intend to intervene in the port strike.
Youngkin’s statement Tuesday called for Biden to take action. “The time for leadership is now, President Biden has the tools to remedy this situation for the Commonwealth of Virginia and the nation, including utilizing provisions of the Taft-Hartley Act. The well-being of Virginia and American workers, as well as the health of our economy, depends on a swift resolution to this strike. A failure to lead will only drive up prices, disrupt trade and exacerbate the challenges already faced by Virginians and Americans.”
In his letter last week to Biden and Harris, Youngkin faulted the White House for reports that “no substantive meetings have happened ” between U.S. officials, USMX and the union since June, adding that “such inaction has jeopardized the economic security and well-being of America.”
In addition to the national impact on supply chains for consumer goods, pharmaceuticals, manufacturing and agriculture, “Virginia’s largest industries, agriculture and forestry, would be severely impacted” by the port strike, Youngkin wrote. “The Port of Virginia supports 10% of gross state product [and] 11% of total employment, including 2,600 longshoremen employed at the Port and approximately an equal number of truck operators.
“In Virginia, employers and local ILA management have a productive relationship,” the governor added. “The Hampton Roads Shipping Association and the local ILA finished their negotiation in June. However, as you know, the national ‘master contract’ must be agreed and ratified before the ILA local members in the commonwealth can act.”
Rachel Shames, vice president of pricing and procurement for Norfolk-based logistics and trade compliance company CV International, said Tuesday she’s also watching to see how long the strike will last. “There are some that firmly believe that this will be two to three days, and they’ll come to an agreement and things will start moving again. There will be certainly a backlog … but if that were to happen … we’ll avoid the worst of potential disruption.”
However, if the strike extends into several weeks, “it will be much, much, much more disruptive,” Shames said, with costs increasing and being passed on to shippers and possibly consumers. “I think the question now is just … is this going to be over in a few days, and we can start digging out and moving forward, or is this going to last into the weeks, and impacts will be broader?”
French shipping giant CMA CGM’s America operation, based in Norfolk, wrote to customers Tuesday that it implemented contingency plans ahead of the strike, noting: “For all cargo received on or after Oct. 11, a Local Port Charge (LPC) will apply as per the governing tariff(s). Cargo received on or after Oct. 11 will not be subject to additional operational costs.”
National impasse
“Even though the ILA’s members worked tirelessly during the pandemic to ensure that the nation’s commerce flowed and continue to sacrifice time with their own families so that goods can arrive in the homes of other families throughout the world, still, due to corporate greed, employers refuse to compensate the ILA’s members fairly,” the union said in a statement released last week.
“Over the last several years, the net revenues of these companies have grown astronomically from hundreds of millions to billions of dollars while ILA members’ wage increases do not even cover the cost of inflation. The ILA is fighting for respect, appreciation and fairness in a world in which corporations are dead set on replacing hardworking people with automation. Employers push automation under the guise of safety, but it is really about cutting labor costs to increase their already exceptionally high profits. As the last six years have demonstrated, automation cannot outperform the skilled men and women of the ILA. Automation of our nations’ ports should be a concern for everyone; the truth is, robots do not pay taxes, and they do not spend money in their communities. The ILA will continue to fight until its members receive the fair contract they deserve.”
In an update Monday night, the USMX wrote: “In the last 24 hours, the USMX and ILA have traded counter offers related to wages. 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. 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%, triple employer contributions to employee retirement plans, strengthen our health care options, and retain the current language around automation and semi-automation.”
However, the last-minute offers failed to prevent the strike.
“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,” said ILA President Harold Daggett, who leads the 85,000-member 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,” said Daggett.
Contributors to this story included Virginia Business Editor Richard Foster; freelance writer Beth Cooper; and NJBIZ, a BridgeTower Media publication.
We use cookies on our website to give you the most relevant experience by remembering your preferences and repeat visits. By clicking “Accept All”, you consent to the use of ALL the cookies. However, you may visit "Cookie Settings" to provide a controlled consent.
This website uses cookies to improve your experience while you navigate through the website. Out of these, the cookies that are categorized as necessary are stored on your browser as they are essential for the working of basic functionalities of the website. We also use third-party cookies that help us analyze and understand how you use this website. These cookies will be stored in your browser only with your consent. You also have the option to opt-out of these cookies. But opting out of some of these cookies may affect your browsing experience.
Necessary cookies are absolutely essential for the website to function properly. These cookies ensure basic functionalities and security features of the website, anonymously.
Cookie
Duration
Description
cookielawinfo-checkbox-analytics
11 months
This cookie is set by GDPR Cookie Consent plugin. The cookie is used to store the user consent for the cookies in the category "Analytics".
cookielawinfo-checkbox-functional
11 months
The cookie is set by GDPR cookie consent to record the user consent for the cookies in the category "Functional".
cookielawinfo-checkbox-necessary
11 months
This cookie is set by GDPR Cookie Consent plugin. The cookies is used to store the user consent for the cookies in the category "Necessary".
cookielawinfo-checkbox-others
11 months
This cookie is set by GDPR Cookie Consent plugin. The cookie is used to store the user consent for the cookies in the category "Other.
cookielawinfo-checkbox-performance
11 months
This cookie is set by GDPR Cookie Consent plugin. The cookie is used to store the user consent for the cookies in the category "Performance".
viewed_cookie_policy
11 months
The cookie is set by the GDPR Cookie Consent plugin and is used to store whether or not user has consented to the use of cookies. It does not store any personal data.
viewed_cookie_policy
11 months
The cookie is set by the GDPR Cookie Consent plugin and is used to store whether or not user has consented to the use of cookies. It does not store any personal data.
Functional cookies help to perform certain functionalities like sharing the content of the website on social media platforms, collect feedbacks, and other third-party features.
Performance cookies are used to understand and analyze the key performance indexes of the website which helps in delivering a better user experience for the visitors.
Analytical cookies are used to understand how visitors interact with the website. These cookies help provide information on metrics the number of visitors, bounce rate, traffic source, etc.
Advertisement cookies are used to provide visitors with relevant ads and marketing campaigns. These cookies track visitors across websites and collect information to provide customized ads.
Sign In
Free Newsletter
