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US East Coast port labour talks hit automation roadblock

Photo: Port of New York and New Jersey A vessel approaches a bridge
This year, the labor-negotiation pendulum has shifted to the US East and Gulf Coasts with the unions pulling back from talks with employers over automation.

The present six-year Master Contract, agreed in 2018, is set to expire three months out, at the end of September. The International Longshoremen’s Association (ILA), representing labour, continues its talks on a Master Contract with the United States Maritime Alliance, (USMX), which “represents employers of the East and Gulf Coast longshore industry. Membership consists of Container Carriers, including the largest carriers and carrier alliances worldwide, all major Marine Terminal Operators, and Port Associations representing each port on the East and Gulf Coasts.”.

Automation at ports remains a hot-button issue. In mid-June, the ILA pulled back from scheduled negotiations with USMX: “after discovering that APM Terminals and Maersk Line are utilizing an Auto Gate system, which autonomously processes trucks without ILA labor. This system, initially identified at the Port of Mobile, Alabama, is reportedly being used in other ports as well.”

In a subsequent development posted by the ILA on its website, the ILA lauded an expression of support received from the International Dockworkers Council (the IDC- an international organization composed of 140 member groups across multiple continents). The letter from IDC stated, in part, that: “Your firm and resolute message to companies, stating that no form of automation that affects the tasks or employment of dockworkers would be accepted, has been truly inspiring.” Referring to the dispute with APM and Maersk in Mobile, the IDC went on to say: “This situation is putting at risk an essential negotiation for the future of dockworkers, companies, and the American economy over the next six years”.

The USMX, in its response, was less verbose, saying simply: “As is typical in our discussions, some issues will require further conversation between the local parties….USMX looks forward to re-engaging with the ILA’s bargaining committee to jointly move local and Master Contract negotiations forward for the betterment of the USMX membership and the ILA rank-and-file.”

Not surprisingly, cargo that had been diverted to the Gulf and East Coasts has been shifting back to the West Coast ports, following the well-publicized moves to the Atlantic and Gulf Coast ports that had occurred in late 2021 and into 2022.

In 2023, as the West Coast ports were wrestling with their own labour negotiations - the Pacific Maritime Association and the International Longshore and Warehouse Union, and cargo had been slow to return. A deal, good through 2028, was struck in September, 2023; it’s worth noting that the workers had been working without a contract for nearly a year.  

The potential for a US East Coast labour dispute to disrupt supply chains was flagged by Xeneta Chief Analyst Peter Sand speaking at TOC Europe earlier this week. “Basically, US East Coast labour negotiations are going sour. So, we should expect, perhaps, from first time ever, if not an outright strike, maybe a work to rule.” He said shippers should be cognizant that they could face problems as the contract gets closer to expiring,

A recent report from John McCown, a leading analyst on US container shipping matters, pointed out to readers that: “April [2024] had East/Gulf Coast ports under-performing West Coast ports as they have in seven of the last eight months…” During the past year, concerns about hostilities in and around the Red Sea, as well as drought-related restrictions at Panama, have also both contributed to the slower growth rate for cargo flows seen at the East Coast ports; the labour concerns now emerging will likely add to the incremental cargo moves back to Pacific ports.