One Less Worry: No Port Strike

Ah, the looming disaster of an East and Gulf Coast ports strike had been lurking around the edges of the euphoria over Trump’s November triumph.

In mid-December, if you remember, there was an interesting twist when President-elect Trump came out with a statement firmly in favor of the longshoremen’s position.

You could have knocked everyone over with a feather, the shock was that surprising at his position.

Brother Bingley and I, once we chewed on it, wound up wondering if the Art of the Dealster wasn’t crazy like a fox.

…Many, many people are losing their cookies over this seemingly nonsensical stance by President Trump – how can he be against ‘efficiency’? You know I’m far from a union fan and will admit to being thrown for a momentary loop myself. Especially since I think Daggett’s a…well, jackass.

On the other hand, the steamship companies (represented on the USMX board) are rapacious predators in their own right and don’t give a rip about their customers or their employees. It’s nice to be a virtual monopoly on a vital transportation mode. They know you gotta have them.

Bingley works with these companies and ports every day. He and I had kind of a chat about the situation, and we’re thinking Trump might just be crazy like a fox.

Bear with me here, because there are a couple of moving parts that have to be put together.

The two sides, the ILA and the USMX, were at loggerheads over what turned out to be a nebulous concept of ‘automation.’

For instance, I read where the ILA wanted the right to put a couple of union workers on already automated lines (who knew) to keep a human eye on things – for what would be a cool average of about $150K a year per body to watch boxes or whatever go by. Of course, wherever those guys had been pulled from to stand watch, they’d be replaced by new hires in the chain, thereby expanding Daggett’s fiefdom.

That was an interesting twist.

…Those familiar with these small group meetings tell gCaptain the technologies being argued were agreed to by the ILA in prior contracts and never displaced jobs.

“These discussions are about existing technologies used by U.S. Terminal operators, not new technologies,” said a terminal operator who has direct knowledge of the discussions. “The technology used at the Port of Virginia and GCT terminal in Bayonne were built from the ground up and never took away union jobs. Now after two contracts, Harold Daggett would like to add at least one dedicated person for each automated RTG (Rubber Tired Gantry Crane) at these terminals even though there is no business need or safety or efficiency gain.”

The salary of that individual would be between $100k–$150k a year based on legacy ILA pay deals, and the individual would watch the crane work.

For their part, port operators said they were willing to talk about those items, but expanding the workforce meant that the heretofore agreed to 62% salary raise was off the table, as that had been predicated on current union membership numbers.

Official talks broke off in November but these ‘small group meetings’ continued with both sides probing, testing, and communicating. The union focused on ‘tightening language’ in prior contracts

…Those familiar with the automation pushback this round of negotiations tell gCaptain that Daggett is trying to stop what he and his committee members previously approved.

…The scrutinized semi-automated and automated technologies deployed at the Port of Virginia were approved under prior contracts. It is all a part of the port’s objective to be net-zero carbon by 2040. In January of 2024, the port became the first on the East Coast to power all its terminals with 100% clean energy—eight years ahead of its 2032 target.

In 2023, the Port announced it was moving ahead with its purchase of 36 new automated stacking cranes (ASCs) manufactured by Konecranes based in Finland. The first group is expected to arrive in mid-2025 and the second set in mid-2027. This $150 million purchase of this technology could have only happened if both sides of the technology committee approved it under the 2018 Master Contract.

…Those close to the negotiations say Daggett is fighting against additional automation that is devoid of human involvement and is seeking contractual leverage to add workers wherever he wants and not where it is needed. If new technology is proposed, a union worker or workers must be added. This is stated plainly in the 2018 Master Contract. This technology labor stipulation also includes the use of computer software.

One terminal operator tells gCaptain that in the November meeting that derailed, Harold Daggett demanded there should no longer be semi-automated operations in Virginia or Bayonne that are devoid of human involvement and that the existing way of working at those terminals shouldn’t be allowed anywhere else. The discussions also fell apart as the ILA is pushing back on technology that allows online trucking appointments and other truck gate transactions that operate automatically. A clerk should be available to pick up the phone to take down a trucker’s appointment and their information. Based on ILA salary history that is publicly available, a clerk is paid anywhere between $20–41 per hour. The clerk demand should come as no surprise to those in the logistics industry. Harold Daggett has stated publicly that automated toll-booth operations like E-ZPass should be eliminated and the manual process of toll-booth workers should return to New Jersey’s highways.

Terminal operators and ocean carriers tell gCaptain these additional jobs would add inflationary pressures within the supply chain. The salaries of the ILA workers are paid by terminal operators, which are then folded into the service fees that are charged and paid by shippers. Those fees are then passed on to the consumer.

They must have had some common ground and the Trump endorsement brought weight to bear because the two sides had a ‘secret meeting’ two days ago, and the union came away from it with the language it wanted in hand.

…A secret meeting between key members of the International Longshoremen’s Association and the United States Maritime Alliance was held on Sunday in an effort to help the dockworkers’ union and ports ownership find common ground on the heated issue of automation and semi-automation. A document produced out of the meeting indicates a focus on the creation of new human jobs to complement any new port technology.

CNBC has learned that the eight-hour meeting took place ahead of the highly anticipated resumption of formal bargaining, and with a January 15 deadline to avoid a new strike by dockworkers. According to sources close to the talks who were granted anonymity due to the sensitive nature of the negotiations — talks had recently broken down over the issue — language on automation was drawn up to assist the full bargaining committee review process slated for Tuesday.

But the sources added that the language could lead to new concerns about added labor costs, and new risks to getting a comprehensive deal on wages and automation completed.

That they were talking was good news, but, as Bingley said, all the ‘cloak and dagger skullduggery’ gave us kind of an inkling it might be headed the way of a settlement, especially if both warring sides had been willing to meet undercover of darkness like that.

Lo and behold, our hunches were right.

They jointly announced a tentative agreement the next day.

The International Longshoremen’s Association (ILA) and the United States Maritime Alliance (USMX) have reached a tentative agreement on a new six-year master contract. The agreement will replace the expiring contract which had been extended after a short strike in October 2024.

The two groups issued a joint statement late Wednesday evening, saying “the two sides agreed to continue to operate under the current contract until the union can meet with its full Wage Scale Committee and schedule a ratification vote, and USMX members can ratify the terms of the final contract.”

In yesterday’s statements, both sides seem pretty satisfied with what they walked out with.

…In a classic compromise, both sides got what they had been seeking. A source with knowledge of the agreement told FreightWaves that terminal operators and ocean carriers get broader rights to introduce semi-automated rail-mounted gantry cranes and other technology they say are needed to improve efficiency in container-handling, while the union receives guarantees for new jobs linked specifically to each piece of equipment. Jobs associated with cranes are among the highest-paying among port workers.

The agreement came together quickly, the source said, after the sides fleshed out details in meetings ahead of formal negotiations.

The sides had previously agreed to a 62% pay increase following the October strike, but that was contingent on completing a new contract. Benefits and container royalties are among the details still to be worked out.

There was a handsome nod to Donald Trump from the union and the revelation of a classic ‘Art of the Deal’ nugget in the news, too.

…In a separate statement Wednesday, the ILA said Trump’s support was key to securing a new contract. The union also revealed for the first time that when Daggett and his son, Dennis Daggett, also a union official, met with Trump at Mar-a-lago in December, the President-elect spoke by phone with USMX officials to express his support for the ILA.

“You have proven yourself to be one of the best friends of working men and women in the United States,” the statement said in part.

I mean, WOWSAHS.

The heat is expected to come off shipping rates, too, which is a relief for the incoming Trump team. It also means folks who ship goods, like Bingley, can back off the Maalox for a little while since shipments might come and go from and to where they were meant to – all as scheduled and without having to selling a kidney to do it.

…The resolution arrives at a crucial moment for the shipping industry, which has already seen significant rate volatility. According to Xeneta, the ocean freight intelligence platform, spot rates from the Far East to the U.S. East Coast had surged 26% since mid-December, reaching USD 6,800 per FEU.

“The agreement between the ILA and USMX must be welcomed because a strike had the potential to be a supply chain and economic disaster,” noted Emily Stausbøll, Xeneta Senior Shipping Analyst.

And then there’s TRUMP.

It had to have killed Politico to write that headline.