Contract talks at East Coast and Gulf Coast ports are starting this year under very different circumstances than the West Coast negotiations that rattled supply chains over the past two years. þþCargo bottlenecks that left imports tied up at sea and at ports have largely cleared while record earnings for ocean carriers, a source of rancor during the West Coast talks, are dissipating in a vastly changed freight market. þþThe International Longshoremen’s Association is seeking to build on strong wage gains other transportation unions have won. The dockworkers’ union is already threatening a strike against shipping companies and port employers if a deal on a new multiyear contract can’t be reached before the current agreement expires Sept. 30. þþHarold Daggett, the ILA’s combative president, told dockworkers at a protest in January outside the Manhattan offices of wind energy giant Orsted, that the forthcoming contract would be the best the union ever had. “Just remember, when we shut down, this whole f—ing world shuts down,” Daggett said. “They don’t realize how f—ing strong we are.“þþThe head of the union that represents more than 45,000 workers at ports from Maine to Texas has told local chapters to resolve local work issues with employers by May 17 so that a coast-wide deal can be negotiated before the current contract expires. Formal negotiations would be scheduled once the local agreements are reached. þþAny walkout would hit the gateways in the middle of the busiest part of the shipping season, when retailers and other importers prepare for holiday consumer sales. þþJeremy Nixon, chief executive of Singapore-based container shipping line Ocean Network Express, told the annual TPM24 shipping conference by S&P Global in Long Beach, Calif., this month he expects East Coast importers will bring in holiday season goods early this year or send more cargo from Asia to ships scheduled for West Coast ports. þþNixon said a strike “will impact all of the ports on the East Coast and we would not be allowed to divert ships from the East Coast to the West Coast because those ships would then be boycotted.”þþSome importers and forwarders believe a coast-wide strike is unlikely, especially one month ahead of the U.S. presidential election in November. They say the administration is likely to step in to avert what would be an economically damaging picket. þþBut some shipping industry officials are wary about the talks in a period when unionized workers from doctors to auto workers have flexed newfound power in the wake of the Covid-19 pandemic and won big wage gains.þþShipping industry officials believe Daggett, 77, also may be looking to cement his legacy as he enters his fourth, and possibly final, four-year term as head of the union.þþThe ILA has won a string of local victories leading up to the talks. The union won a years-long legal battle last year that gutted a regulator at the Port of New York and New Jersey. This year, it won litigation that will effectively force the Port of Charleston to employ more unionized dockworkers at a new container-handling terminal. þþThe union and employers started talks in late 2022 with the aim of securing an early agreement. But the negotiations stalled a year ago and were in limbo until Daggett said they should resume in February. þþSome U.S. importers said they aren’t worried about the East Coast labor talks because West Coast contract talks that concluded last year weren’t as disruptive as initially feared. þþDockworkers staged sporadic labor actions during the talks that stretched for more than a year, disrupting container-handling operations at ports up and down the coast but not causing significant cargo delays. The Biden administration stepped in last summer when the disruptions appeared to be getting worse and brokered a deal that saw West Coast dockworkers receive a 32% wage increase over six years.þþShipping industry officials said the ILA is pursuing a much bigger wage increase.þþThat could be harder for carriers to absorb as their finances have shifted over the past year. Ocean shipping lines made tens of billions of dollars during the pandemic, when freight demand soared and rates skyrocketed. But profits slumped after cargo volumes and rates plummeted. þþDave Adam, the chief executive of the U.S. Maritime Alliance who will lead negotiations for the ocean carriers and marine terminal operators, said he is confident a deal can be reached. þþ“The nice thing about working with Harold is he is the epitome of a strong union leader,” Adam said. þþ
Source: wsj.com
