SHIPPING: Union, US ports remain at impasse as strike enters second day

HOUSTON (ICIS)–Negotiations have yet to resume between union dock workers and the US Gulf and East Coast ports as a costly strike enters its second day.

The International Longshoremen’s Association (ILA), representing dock workers at ports from Maine to Texas, and the United States Maritime Alliance (USMX), representing the ports, posted statements to their websites accusing each other of being unwilling to negotiate.

“We have demonstrated a commitment to doing our part to end the completely avoidable ILA strike,” USMX said. “Our current offer of a nearly 50% wage increase exceeds every other recent union settlement, while addressing inflation, and recognizing the ILA’s hard work to keep the global economy running. We look forward to hearing from the union about how we can return to the table and actually bargain, which is the only way to reach a resolution.”

The ILA responded by saying the USMX offer fails to address the demands of union labor.

“They might claim a significant increase, but they conveniently omit that many of our members are operating multi-million-dollar container-handling equipment for a mere $20 an hour,” the ILA said. “In some states, the minimum wage is already $15. Furthermore, our members endure a grueling six-year wage progression before they can even reach the top wage tier, regardless of how many hours they work or the effort they put in.”

One of the biggest sticking points remains the union’s steadfast stance against any kind of automation at the ports – full or semi – that would replace jobs or historical work functions.

“We will not accept the loss of work and livelihood for our members due to automation,” the ILA said. “Our position is clear: the preservation of jobs and historical work functions is non-negotiable.”

FMC OFFERS SERVICES
With carriers already announcing congestion surcharges, the US Federal Maritime Commission (FMC) is offering assistance for enforcement and litigation services that individuals and companies could find helpful in seeking relief from current supply chain challenges.

FMC regulations require that demurrage and detention fees serve as legitimate financial incentives to encourage cargo movement. Pursuant to these requirements, the FMC will scrutinize any demurrage and detention charges assessed during terminal closures.

The FMC advised all regulated entities on 23 September that all statutes and regulations administered by the commission remain in effect during any terminal closures related to the strike.

GOVERNMENT INTERVENTION REQUESTED
Meanwhile, the American Chemistry Council (ACC) and the Alliance for Chemical Distribution (ACD) continue to request government intervention to end the work stoppage.

“We urge the White House to do everything possible to prevent this major shockwave from rippling through the American supply chain and hurting US trade by working with both parties to resume contract negations,” Chris Jahn, ACC president and CEO, said.

Jahn noted that about 90% of the waterborne chemical shipments that move in and out of the US flow through the East Coast and US Gulf Coast ports.

Eric R Byer, president and CEO of the Alliance for Chemical Distribution (ACD) also urged President Joe Biden to act.

“ACD urges the Biden Administration to swiftly intervene to resolve this strike by reopening the ports and getting both sides to reach an agreement to prevent further supply chain disruptions and avoid significant economic consequences,” Byer said.

Biden, in a statement released last night, said he supports the collective bargaining process as the best way for workers to get the pay and benefits they deserve and urged USMX to return to the bargaining table with a fair offer.

“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,” Biden said. “Executive compensation has grown in line with those profits and profits have been returned to shareholders at record rates. It is 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 also said his administration will be watching for any price gouging activity that benefits foreign ocean carriers, including those on the USMX board.

IMPACTS TO CHEM MARKETS
The strike is already affecting the US chemicals industry, with PE exports to Brazil being put on hold.

The polyvinyl chloride (PVC) Industry is concerned as all US Gulf PVC exports move out of one of the impacted East Coast ports.

In the polyethylene terephthalate (PET) market, imports of PET resins have already been diverted to the US West Coast in anticipation of the work stoppage.

Focus story by Adam Yanelli

Visit the ICIS Logistics – impact on chemicals and energy topic page

Thumbnail image shows a container ship.