Posted on May 15, 2024
Master contract negotiations at the East Coast ports could be coming back online in as little as a few days.
The International Longshoremen’s Association (ILA) and its maritime employers the United States Maritime Alliance (USMX) said Monday they expect to complete their local contract bargaining by Friday at all Atlantic and Gulf Coast ports.
Both parties expect master contract negotiations to resume once the local contracts are completed. In February, the ILA gave local unions a May 17 deadline to complete the bargaining talks at the individual ports.
“We are confident that with tentative local contracts negotiations scheduled to be completed by the May 17th deadline, the ILA and USMX can begin full master contract talks with the goal of reaching an agreement on a new pact before the Sept. 30, 2024, expiration of the current contract,” said ILA president Harold J. Daggett and USMX chairman/CEO David F. Adam, in a joint statement. “The ILA and USMX expect to continue the success of our 2012 and 2018 master contract negotiations where two landmark six-year agreements were achieved without any disruption or delays in shipment of cargo.”
Daggett and the union have held firm that its now-85,000 members across 36 ports from Maine to Texas would go on strike if a national deal is not put in place by the Sept. 30 deadline. This would run counter to what occurred at West Coast ports through 2023, where the International Longshore Workers Union (ILWU) continued to work without a contract for nearly a year before coming to a new deal last June.
A new deal would likely to be similar to the reported 32 percent wage increase achieved by the ILWU last year, with the ILA seeking to capitalize on the West Coast union’s win. That six-year contract also included an additional “hero bonus” package for working through the early stages of the Covid-19 pandemic.
The contract negotiations initially began as far back as late 2022, and were on and off throughout 2023, but they largely petered out last October after both parties failed to agree on wage increases, according to Daggett.
Two associations that will be keeping a close eye on the talks are the National Retail Federation (NRF) and the American Apparel & Footwear Association (AAFA), many of whose member retailers are reliant on ports operating without any interruptions.
“We are encouraged that the ILA and USMX will be returning to the master contract negotiations,” said Jonathan Gold, vice president of supply chain and customs policy, NRF, in a statement. “It is critical that the parties reach an agreement before the contract expires at the end of September, which will be the height of peak shipping season. The parties must remain at the table and not engage in any disruptions that could impact shipments for the holiday season.”
Steve Lamar, AAFA president and CEO, shared similar viewpoints, saying “this is an auspicious sign and hopefully on indicator that we can expect a smooth and on time renewal of the master contract. That said, it is still vital for both parties to remain at the table until a final deal is reached and for the Administration to make sure we have no interruption in port services.”
The East Coast ports have had extra work on their plate as the local contract negotiations have played out. Since the Francis Scott Key Bridge collapsed on March 26, ports in New York and New Jersey, Virginia and Philadelphia are among those taking on extra cargo that would have been delivered to the still-closed Port of Baltimore. That port is supposed to reopen by the end of May.
Various ports along the coasts are expanding throughout the negotiations as more cargo flows in their direction, further compounding the issue of a potential strike while also likely giving the union more bargaining power.
For example, the Port of Virginia is currently investing $1.4 billion in expansion via its Gateway Investment Program, which is focused on adding more capacity and modernizing its terminals. Roughly $450 million of that total is allocated to a dredging project designed to make the port the widest and deepest port on the East Coast by early 2025.
That project is built to ensure that the port can handle more ultra-large container vessels (ULCVs), the mega container ships that can carry more than 20,000 twenty-foot equivalent units (TEUs). The port is currently adding more berths and newer, taller cranes to handle the vessels. It has two berths, with one at each port terminal, but that will be expanded to five.
Concurrently, the Georgia Ports Authority (GPA) is investing a whopping $4.5 billion across several longer-term investments over the next decade. By 2030, if the GPA’s plans pan out, the Port of Savannah’s annual capacity will rise to more than 12 million TEUs, up from about 7 million this year.
As the ILA grapples with expanding surface area for its dockworkers to cover, the union got itself a significant win earlier this year.
Earlier this year, the labor group won a labor dispute that will require the Port of Charleston to employ more union dockworkers to operate cranes at one of its recently constructed terminals.
