Everything you Need to Know About Upcoming US Port Strikes

Ports along the U.S. East Coast are bracing for a potential labor strike next week—the first major protest of this kind since 1977.

This week, we wanted to take a closer look at the conflict and why it could likely disrupt global trade in the coming weeks.

Let's start with the basics: what is is happening?

The conflict itself centers around two major players: the U.S. Maritime Alliance, representing ports from Texas to Maine, and the International Longshoremen's Association (ILA), which represents over 45,000 workers. Every six years, these two forces renegotiate the master contract that administers the salaries of those 45,000 workers.

But this time around, negotiations have reached a critical point, with the ILA signaling a strike could occur this October 1st if no agreement is reached by the end of September.

Why? There are at least two central issues. The first is the growing concern over port automation, which threatens to eliminate union jobs. The ILA has strongly opposed automation initiatives, especially after early negotiations reportedly stalled over automation plans at the port of Mobile.

The second point of contention involves wages. The ILA has pushed for a significant wage increase, proposing a $5 hourly raise for each year of the new agreement. This would boost wages from the current $39 per hour to $69 per hour by 2030.

To understand just how meaningful this shift would be, we at Auba read through the past two master contracts between the ILA and the U.S. Maritime Alliance. Comparatively, past agreements only included more modest increases. For instance, the 2018 contract raised wages by about $1 per year, bringing hourly pay from $32 to $39 over six years. The current demands represent a dramatic shift, increasing ILA salaries by over 76%.

A key factor driving the ILA’s demands is the recent boom in global shipping. The COVID-19 pandemic saw container shipping rates soar to over $10,000 per 40-foot container. Although rates have since dropped, ongoing disruptions, such as the blockage of the Red Sea by Houthi rebels, have kept shipping costs elevated, bolstering the ILA’s position. As the deadline approaches, the outcome of these negotiations will determine whether the East Coast faces a historic labor strike that could significantly impact U.S. trade.

Regardless of the reasons, if those 45,000 workers were to go on strike ports as large as Houston or New York would struggle to maintain the flow of goods—but we will talk more about this on a future post.

Interested in learning more? Follow our newsletter: