Port Workers Could Strike Again if No Deal Is Reached on Automation

Ports on the East and Gulf coasts could close next week if dockers and employers cannot overcome their big differences over the use of automated machines to move cargo.

The International Longshoremen’s Association, the union that represents longshoremen, and the U.S. Maritime Alliance, an employers’ bargaining group, resumed face-to-face talks Tuesday aimed at reaching a new labor agreement.

After a short strike in October union and alliance agreed 62 percent are raising wages for longshoremen for six years – and said they would try to work out other parts of the contract, including provisions governing automated technology, by Jan. 15.

If no agreement is reached by that date, ports that account for three-fifths of U.S. container traffic could close, hurting businesses that rely on imports and exports and presenting an early test for the new Trump administration.

“If a strike occurs, it will have a significant impact on the U.S. economy and the supply chain,” said Dennis Monts, chief commercial officer at PayCargo, a logistics payments platform.

The union is resisting automation because it fears job losses at the ports. President-elect Donald Trump supported the union’s position last month. “I have studied automation and know almost everything there is to know about it,” he said on his Truth Social website. “The amount of money saved is nowhere near equal to the pain, suffering and harm it causes to American workers, in this case our longshoremen.”

But figures close to Trump such as Vivek Ramaswamy, who the president-elect said will co-chair an agency that advises his administration on government downsizing, have criticized the union. In October, congressional Republicans called on President Biden to use the Taft-Hartley Act to force striking longshoremen back to work.

And while the maritime alliance agreed to a significant increase, it may not be as willing to compromise on technology. Employers say the technology is needed to make ports more efficient and that they want the new contract to give them more freedom to introduce equipment the union opposes.

To prepare for possible East Coast and Gulf Coast port closures, businesses have expedited imports of some goods, delayed others and diverted some to West Coast ports, said Jess Danckert, vice president of supply chain for the Retail Industry Leaders Association, which represents many businesses that imported goods.

“The contingency plans are pretty well developed,” she said, but added that a strike lasting more than a week would have significant ripple effects that could take some time to resolve.

The International Longshoremen’s Association declined to comment.

The cost of shipping a container has risen by more than 60 percent on average over the past year, largely due to attacks on shipping in the Red Sea. forced ocean carriers to travel longer and more expensive routes and use more ships. And if ports in the East and Gulf Coast close, as some carriers have recently said, they will add surcharges to shipping rates for containers heading to those ports.

In previous negotiations, the union reached an agreement that would increase wages from $39 an hour to $63 an hour by the end of the new six-year contract. With shift work and overtime, many longshoremen’s salaries at some East Coast ports can rise to more than $200,000 a year. (At the Port of New York and New Jersey, nearly 60 percent of longshoremen earned between $100,000 and $200,000 in the 12 months through June 2020, the latest available data, according to the agency that helped oversee the port.)

But to get that raise, the union will have to negotiate the rest of the contract, including new automation provisions.

The core of the technological dispute concerns “semi-automatic” port technology, which does not always require human intervention. At the Port of Virginia, people operate cranes that load containers onto trucks. but cranes can independently stack huge stacks of containers.

The last labor contract allowed for the introduction of semi-automated technology where both parties agreed to workforce protections and staffing levels. But in recent months, leaders of the International Longshoremen’s Association have criticized port operators’ use of semi-automated technology, arguing it will lead to job losses.

“Now employers are rallying for the last remaining jobs under the shiny banner of semi-automation,” said Dennis A. Daggett, the union’s executive vice president. wrote in a message to participants last month.

Employers want the new contract to allow them to introduce more technology. In a statement to The New York Times last month, the maritime alliance said it intends to maintain job protections, but added: “We are now focused on how to strengthen our ability to deploy equipment that will improve safety and increase efficiency, productivity and capacity.”

Even with automation, the hiring of longshoremen at the Virginia port has increased, according to the union. The increase in the number of containers handled by the port is largely responsible for the increase in staff hiring.

“The Port of Virginia is thriving because of automation,” said Ram Ganeshan, professor of operations and supply chain at William & Mary in Williamsburg, Virginia. “They are not mutually exclusive.”

Some labor experts said there was a compromise model: the union could agree to more automation, but employers would provide strong job security.

The International Longshore and Warehouse Union, which represents West Coast dockworkers, agreed contract more than ten years ago who “recognized that the introduction of new technologies, including fully mechanized and robotic marine terminals, is bound to displace traditional jobs and workers in shore-based facilities.” The union received guarantees that its members will maintain and repair equipment at the terminals.

Harry Katz, a professor at Cornell University’s School of Industrial and Labor Relations, said the deal on the East and Gulf Coasts was possible in part because employers were profitable enough to offer job guarantees. “I expect a compromise,” he said.