Report: ILA-USMX to Resume Contract Negotiations for East/Gulf Coast Ports

A report from S&P Global’s Journal of Commerce says talks are set to resume between the International Longshoremen’s Association and the terminal operators at U.S. East Coast and Gulf Coast ports represented by the U.S. Maritime Alliance (USMX). This comes after weeks of an impasse between the union and the employers which reportedly centers around the use of semi-automated equipment in the ports.

The union and the association have not confirmed the reports, but sources told the Journal of Commerce that talks are set to resume on January 7. That would be just nine days before the end of the master contract for all the longshoremen handling containers and vehicles at the U.S. ports. The two sides extended the deadline as part of an agreement on wage increases struck in October to end a three-day walkout. The deadline is midnight on January 15 with the union having threatened to resume the strike on January 16, just four days before the inauguration of Donald Trump as the next U.S. president.

Union members are anxious for an agreement because they are waiting for the agreed 60-plus percent wage increase to start. The ILA deferred the implementation of the wage increase until the other issues were resolved in the contract. In addition to the ILA’s firm stance against automation, issues regarding benefits are still to be resolved.

USMX responded to the ILA saying that it was willing to extend the existing contract structure to review proposed automation. The terminal operators contend that they are out of space to expand in most locations and must use new technologies to respond to the need to increase volumes. The current contract establishes a review committee that includes union representatives for any proposed semi or fully automated systems.

Major U.S. ports including the Port of New York – New Jersey currently do not have automated systems for handling containers putting them at a disadvantage to other global ports which have embraced the technology. Ports on the U.S. West Coast which are under a different union have accepted some automation technologies.

The ILA contends the technology is a replacement for jobs and not needed to maintain productivity at the ports. In addition to container handling systems, it objected for example to an automated gate system deployed by APM Terminals in Mobile, Alabama calling it a contract violation.

President-elect Trump met with the union leaders and issued a strong statement in support of the ILA and its fight against automation. He called on the foreign-owned shipping companies to respect the longshoremen in the contract negotiations. President Joe Biden and his administration pressured the USMX to raise its wage offer in October to settle the prior strike.

Carriers and shippers have already begun to prepare for a possible prolonged work stoppage in mid-January. Maersk, CMA CGM, and Hapag-Lloyd have all issued alerts to customers calling for efforts to expedite container movements out of the terminals while saying they would explore the options if a strike paralyzes the ports. Maersk and Hapag have also announced plans for a work disruption surcharge for all containers moving through the U.S. ports.

Trade groups continue to urge the two sides to resolve the contract. They have said a strike would have dramatic impacts on the U.S. economy while Trump has promised to lower costs for the American consumer.