Work at Wilmington Shipping Port has ground to a halt as East Coast’s first strike in 47 years

As of midnight Monday, major East Coast shipping ports were paralyzed for the first time in nearly 50 years.

More than 45,000 longshoremen with the International Longshoremen’s Association are on strike as their contract deadline expires in the early hours of Tuesday morning.

This includes longshoremen at the ports of Wilmington and Philadelphia. The shutdown will affect all major U.S. shipping ports from Maine to the Texas Gulf Coast, 13 ports that handle about half of all cargo that arrives in the U.S. by sea, including as much as three-quarters of the country’s banana imports.

“This will go down in history,” UAW President Harold Daggett shouted to a group of striking New Jersey longshoremen in a video posted early Tuesday on the union’s Facebook account. Some workers held signs that read, “Machines don’t feed families.”

“Without us, nothing moves — nothing,” Daggett said.

This is the first such strike on the East Coast since 1977, when a UAW strike halted cargo imports to the East Coast for 44 days.

The stoppage follows a long-running dispute between the longshoremen’s union and the American Maritime Union, a group of port operators, over wages and the use of automation at ports. Each side has accused the other of not negotiating in good faith.

A permanent strike could cost the U.S. economy more than $500 million a day at a time when the economy is increasingly dependent on imported goods, according to an analysis by the Conference Board, a think tank. A permanent strike is expected to lead to higher costs in a country just recovering from post-pandemic inflation and disrupt deliveries of cars, electronics, pharmaceuticals, fresh produce, seafood, coffee, alcohol, toys and IKEA furniture.

The ILA said its workers would continue to handle warship cargo and that the strike would not affect cruise ships. For weeks, as the strike deadline approached, retailers and ports scrambled to speed up shipments before the busy holiday season.

But ultimately, the deadline came and went. The port is closed. Cargo won’t move. Port workers are striking. Here’s what we know about the largest port workers strike on the East Coast.

Why are ILA workers striking?

Members of the International Longshoremen’s Association are waiting to find out on March 26, 2024, if they will need to work at the Port of Wilmington.

The ILA has long said it is prepared to strike over a new contract, arguing that port workers who applied for work during the pandemic did not receive a fair share of windfall profits for port operators early in the COVID-19 pandemic — and that their expiring contracts have not kept up with recent inflation.

“The recent agreement between USMX and the ILA predates the COVID-19 pandemic and the hyperinflation that has occurred,” said William Brocher, a Rutgers University professor and port labor expert. “So the value of the pay raises they negotiated is much lower… In fact, you could say they’ve been late ever since.”

East Coast longshoremen say they are underpaid compared to the recent contract signed by West Coast workers represented by the International Longshore and Warehouse Workers Union. Under the West Coast contract, which expires Oct. 1, longshoremen will have a maximum base pay of about $55 an hour, while East Coast employees will have a maximum base pay of $39 an hour.

Union President Daggett noted that his union is seeking $5 an hourly wage increase each year over the six-year contract.

Another point of contention is the use of new technology and automation, which union leaders worry will cost time and jobs. In June, contract talks broke down over an automated port gate in Mobile, Alabama, with the union claiming the project violated an existing agreement with the International Association of Ports and Harbors.

“As long as I live, we will never allow automation to come into our union and try to put us out of business,” union president Daggett said in a July statement.

The Maritime Union of America filed a labor grievance in September, saying the union refused to negotiate. The union said management refused to make them a fair offer.

On Monday morning, the last day of the union’s contract, ILA President Daggett said USMX was blocking a path to resolution by “rejecting ILA’s demands for a fair and decent contract and seemingly intent on sparking a strike at ports from Maine to Texas.”

That strike has now arrived.

How long will the strike last? Will President Biden stop the port strike?

Brocher, a Rutgers University labor studies professor, said the union has indicated a willingness to fight, but both sides have strong incentives to end the strike.

On the one hand, given the size and power of the ILA, workers have significant leverage in halting transatlantic cargo shipments.

“The threat of disruption to consumers and disruption to the operations of companies like Amazon, Walmart, Target and all the major retailers puts a lot of pressure on shippers who are registered under the USMX name for business purposes and need to significantly increase their offerings,” Brocher said.

President Joe Biden said Sunday that he has no intention of invoking the 1940s Taft-Hartley Act to require a “quiet period” and thereby interfere with contract negotiations, which has strengthened the union’s leverage, Brocher said.

“I don’t think it’s an exaggeration that Biden is the most pro-labor president in decades; you could say the most pro-labor president since Franklin Roosevelt, Lyndon Johnson and John F. Kennedy in the 1960s,” Brocher said. “So, as you know, the union is in a very strong position. Biden has not indicated that he will change course,” he added.

“This is collective bargaining. I don’t believe in Taft-Hartley,” the president said Sunday. His administration urged both sides to reach a deal.

Brocher said even if the union is in a strong negotiating position, workers have a simple motivation to want a deal: their financial situation when they lose their jobs.

“Being off work for a long time drains resources,” Brocher said. “At the end of the day, they want to know if they made progress.”

The last ILA strike on the East Coast, in 1977, ended after 44 days. In 2002, President George W. Bush invoked the Taft-Hartley Act to prevent a West Coast dockworker shutdown.

Port operator Enstruct wrote last week that it “will continue to support our customers until normal operations are resumed.”

What are the potential impacts of port strikes on the East Coast?

A strike by the International Longshoremen’s Association, which represents 85,000 dockworkers, could shut down major port facilities in Newark and Elizabeth.

A prolonged strike at East Coast ports would severely impact broad swathes of the economy, especially vacation products that have yet to reach those shores, according to industry observers. East and Gulf Coast ports handle more than half of the nation’s container volume and a quarter of all U.S. international trade.

A weeklong strike could cost as much as $3.78 billion, or $540 million a day, according to The Conference Board, a think tank.

“A port strike would weaken U.S. trade and push up prices just as consumers and businesses are beginning to feel the effects of easing inflation,” Erin McLaughlin, an economist at the Conference Board, wrote in an analysis released Monday.

In addition to vacation products, other goods that could face shortages and price increases include:

Seafood, such as cod from Iceland or Canada and shrimp from Thailand and Ecuador, experts said. “It’s not easy to ship by train because it’s refrigerated and perishable,” Chris Tang, a professor and supply chain expert at the University of California, told USA Today on Friday.

According to Tang, electronic products such as cell phones and computers are no longer from China, but from Southeast Asian countries such as Vietnam, Indonesia, Thailand, and are shipped through East Coast ports.

Pharmaceutical products. Tang said that although they can be shipped by air, if the negotiations are not resolved in about a month, there may be a shortage of medicines.

Automobiles and auto parts. The Port of Baltimore leads the country in automobile transportation. Experts say that European cars passing through this port may face shortages. Auto parts from Europe often pass through East Coast and Gulf Coast ports.

Machinery parts. According to S&P Global Market Intelligence, East Coast ports are better than other U.S. ports in the transportation of machinery, steel and precision tools.

Bananas. Three-quarters of the country’s bananas come in through East Coast and Gulf Coast ports, said Jason Miller of Michigan State University. “The likelihood of shipping all of these imports through the West Coast is (zero), and the lower dollar value per unit weight of bananas means it’s not economical to load them on airplanes,” he wrote in a LinkedIn post. “Also, you can’t preload perishable products.”

Imported wine and spirits. Imported wine and spirits, mostly from Europe, flow through East Coast ports. Frank Pagliaro of Wilmington-based FranksWine said distributors began preparing for the strike before it happened. “Suppliers are already on the move, telling us to stock up for the holidays because of potential shortages,” Pagliaro wrote Monday.