Biden urges USMX for a ‘fair offer’ as strike heads into second day

US President Joe Biden has urged the United States Maritime Alliance (USMX) to offer a fair deal to the International Longshoremen’s Association (ILA) after the union launched a coast-wide shutdown of ports from Maine to Texas on October 1, 2024. Tens of thousands of ILA members are striking at key waterfront facilities after rejecting USMX’s final contract offer, marking the first major port strike in nearly 50 years.

“Ocean carriers have made record profits since the pandemic and in some cases profits grew in excess of 800% compared to their profits prior to the pandemic. Executive compensation has grown in line with those profits and profits have been returned to shareholders at record rates,” Biden said in a statement.

“It’s only fair that workers, who put themselves at risk during the pandemic to keep ports open, see a meaningful increase in their wages as well.”

Biden added that his administration will monitor any price gouging activity that benefits foreign ocean carriers, including those on the USMX board. Biden’s statement effectively supports the ILA while ruling out the potential invocation of the Taft-Hartley Act, reaffirming his previous stance. The unions have warned that even if ordered back to work, such a mandate would lead to reduced productivity and could cripple port operation

The US Department of Transportation has called on ocean carriers to withdraw their surcharges. Specifically, carriers including Hapag-Lloyd, Maersk and CMA CGM have introduced surcharges on imports into US east and gulf coast ports from several regions, including Europe, Africa, the Middle East, and Latin America.

Read more: Contingency plans, new surcharges emerging ahead of expected strikes in US

“No one should exploit a disruption for profit, especially at a time when whole regions of the country are recovering from Hurricane Helene. The Federal Maritime Commission (FMC) has stated that it will use the authority the President called for and signed into law to ensure any fees assessed are legitimate and lawful,” Transportation Secretary Pete Buttigieg said.

“President Biden has directed our administration to use every authority at the federal level and to support state and local officials as they use the authorities at their disposal. We are closely monitoring potential supply chain impacts and assessing ways to address potential impacts, if necessary.”

Growing friction between USMX and ILA

Meanwhile, tensions between the USMX and ILA continue to brew. In its latest statement, the ILA accused USMX of distorting facts in their recent press release, dismissing claims of a “nearly 50% wage increase.”

The ILA said the “50% wage increase” doesn’t address key demands, such as members operating costly equipment for just US$ 20 an hour, with minimum wages in some states being already US$ 15. They also criticised the six-year wage progression and lack of guaranteed work for two-thirds of workers.

The ILA argues that two-thirds of its members are on-call with no guaranteed work, earning benefits only from the previous year’s hours, and must endure a rigid six-year wage progression system without opportunities for faster advancement, regardless of effort.

“We are now demanding a US$ 5 an hour increase in wages for each of the six years of a new ILA-USMX Master Contract,” said ILA President Harold Daggett. “Plus, we want absolute airtight language that there will be no automation or semi-automation, and we are demanding all Container Royalty monies go to the ILA.”

The union added that Container Royalty funds, derived from fees imposed on shipping companies for containerised cargo, were intended to be a wage supplement paid out to its members, not to be shared with employers.

Daggett joined thousands of union members outside the gates at Maher Terminal in Port Elizabeth, New Jersey and walked picket lines at APM Terminals and Port Newark Container Terminal.

“Our position is firm: we believe in the value our incredible rank-and-file members bring to this industry and to our great nation. They deserve a contract that recognizes their contributions, secures their jobs, and reflects the profits generated by their labour. This is what it will take to bring the ILA back to the table to continue talks,” ILA said.

The ILA plans for the demonstrations to continue around the clock, 24/7, until USMX meets its demands.

The economic impact of the strike is yet to be determined, but Peter Sand, Xeneta’s Chief Shipping Analyst, noted that perishable goods and fresh produce, such as bananas, will be the first to be affected. While some effects of the strike will be immediate, the severity of supply chain delays and economic repercussions will depend on the strike’s duration.