ILA Strike Watch 2024: Union Rejects Wage Offer & Prepares to Strike

Universal Cargo’s blog has been uncharacteristically quiet to start this month because I both moved and traveled across the country for a family wedding and mini-vacation. In the meantime, the threat of an International Longshoremen’s Association (ILA) strike shutting down East and Gulf Coast ports has only become more likely.

There have been a few developments while I was out. Thus, we catch up on the ILA contract negotiation and potential strike today. And it has heated up.

Talks between the ILA and United States Maritime Alliance (USMX) remain stalled with no news of the union returning to the negotiation table. Yet the union remains resolute to strike in just over a month and a half if a contract is not reached.

While ports are bracing for one last push of cargo ahead of the potential strike, which I might blog about Thursday, negative rhetoric grows around the negotiations, details about the wage impasse between the parties has come to light, and ILA preparation for a strike is underway…

USMX Offers Big, Industry-Leading Wage Increase

The details have not been fully disclosed, but the USMX made a huge wage increase offer to the ILA.

Last week, the USMX put out a release that gave some details on its latest proposal to the ILA:

Our latest proposal would include industry-leading wage increases, boost employer retirement contributions, offer new employees higher starting wages, raise employer contributions to local benefits, and continue to provide premier health coverage. It also retains the existing technology language that created a framework for how to modernize and improve efficiency while protecting jobs and hours – a priority for our members and the ILA.

“Industry-leading wage increases” would mean a pay hike for East and Gulf Coast workers by at least a third of what they currently make. That’s just the starting point because the ILWU got a 32% pay hike in its new contract for dockworkers on the West Coast last year. The offered raise could be significantly more.

Reporting from Michael Angell in the Journal of Commerce (JOC) confirms that the union is indeed being offered a pay raise for East and Gulf Coast dockworkers that’s higher than what dockworkers on the West Coast received:

While specifics of the latest wage proposal were not disclosed, a source close to the negotiations said the USMX is offering East and Gulf coast dockworkers a pay increase that is higher than the 32% raise that West Coast dockworkers received in 2023.  

Not Enough – ILA Wants About 80% Wage Increase

The pay raise offer by the USMX is not nearly enough for the ILA. Two days ago, on Facebook, the union wrote in response to USMX’s release, “we are very far apart, particularly on the economic issues. In fact, we are at an impasse.”

Wage demands from the union reportedly include an almost 80% pay hike. Among the sources that have reported on that is Michael Angell in another article from the Journal of Commerce:

The International Longshoremen’s Association (ILA) is seeking an almost 80% wage increase over the life of its next six-year contract with maritime employers on the East and Gulf coasts, two ocean carrier sources familiar with the negotiations told the Journal of Commerce

…

The ocean carrier sources told the Journal of Commerce the ILA is currently seeking a $5-per-hour increase in wages for each year of the contract’s term. That represents a 76% increase over six years in the top straight-time wage for longshore workers. 

By the end of the contract, the raise demanded by the ILA would have longshoremen making $30 more an hour for approximately $62,400 in additional wages to their current pay per year per full-time worker without considering overtime or holiday pay.

The ILA represents over 85,000 dockworkers. If they were all full-time, and we rounded down to the 85,000, by the last year of the contract, the USMX would be looking at paying over $5.3 billion more in wages over a year than they do now. If only half are full-time (averaging the rest at 20 hours per week), the yearly pay would be close to $3.98 billion more than it currently is.

If the ILA wage demands are reported accurately, it’s no surprise the parties are “very far apart.”

ILA Is the Only Source of Truth?

In their Facebook response to the USMX release, Harold and Dennis Daggett, ILA President and Executive Vice President, respectively, told ILA members that such USMX communication is propaganda. The Daggetts went so far as to tell ILA members “unless you hear it directly from us, it’s not the truth.”

Rather than comment on their rhetoric, I’d rather let you judge it for yourself, so here’s the full text of the ILA post, which included an image of the previously discussed USMX release:

Attention ILA Members,

I want to address the recent communication from USMX and make it clear—do not be fooled by this letter. We are indeed continuing to bargain in good faith to settle all local contracts, but the reality on the ground is far different from the picture they are trying to paint.

Employers like APM Mobile have been dragging their feet on resolving critical issues. One such issue is their use of Autogate in TIR Lanes, which we consider a clear violation of our Master Agreement. This isn’t just happening in one location; many other ports are facing similar challenges in getting local management to agree on terms and conditions for local supplemental agreements.

On top of that, when it comes to the Master Contract negotiations, let me be frank—we are very far apart, particularly on the economic issues. In fact, we are at an impasse. The propaganda coming from USMX is just that—propaganda, likely the work of a PR firm trying to spin the situation in their favor.

Remember, unless you hear it directly from us, it’s not the truth. Stay strong, stay united, and know that we are fighting every day for the fair contract that you deserve.

In Solidarity,

Harold and Dennis Daggett

ILA Meeting to Strategize for Strike & Present Demands

The ILA announced it will meet early next month to present its members with its contract demands and prepare them for a strike that would start October 1st if a contract isn’t agreed upon by then.

Among the outlets that reported on this is Supply Chain Brain, which shared in an article:

According to a release from the union on August 5, the ILA will conduct a two-day “marathon” session spanning September 4-5 in New Jersey, where it will present its proposed contract terms to its wage scale committee. ILA chief negotiator Harold Daggett said that the meeting will also give the union a chance to strategize for a potential strike if an agreement isn’t reached by the time the union’s contract expires on September 30.

“My membership is 100% behind the ILA leadership team, and they know we want to deliver the best contract for them,” Daggett said. “If that means we have to go out on strike October 1, they are ready to ‘hit the streets’ if our demands are not met.”

…

The ILA has also sent notices to its employer groups that it will not offer an extension to its expiring labor deal, keeping September 30 as the cutoff date for an agreement. If a deal isn’t reached by then, East and Gulf Coast port workers will go on strike on October 1.

Conclusion

Things don’t look good right now between the ILA and USMX. There’s a month and a half for the situation to get better, but this is the largest full-scale strike threat we’ve seen at the East and Gulf Coast ports in over a decade.

Sometimes, things heat up right before they start getting better. Perhaps we’re reaching that point. The deadline is getting closer and closer, so both parties are making noise to get the results they want.

We’ll be watching, and sharing with you here in Universal Cargo’s blog, for signs that we’re getting closer to what shippers want: resolution without a strike shutting down the ports.

ILA Strike Watch Posts

If you want to go back and revisit the events leading to where we are now, here are Universal Cargo’s ILA Strike Watch 2024 posts plus ones on the situation outside of official “Strike Watch” posts:

ILA Stance Is Worse Than Just Threatening Strike

ILA Already Threatening Strike

We Have to Talk About the ILA Strike Threat

How to Prepare for Potential ILA Port Disruption

No One Knows What Will Happen with ILA Port Disruption

Early Peak Season, High Freight Rates, & 5 Factors Shaping Ocean Freight Shipping 2024

ILA Strike Watch 2024: Cancelled Talks & Strike Threat Increase

Are There Any Signs the Early Peak Season Is Slowing Down?

ILA Strike Watch 2024 – US Trade Groups Ask Biden to Get ILA to Negotiation Table

ILA Strike Watch 2024: Biden No, Trump Yes?

ILA Strike Watch 2024: ILA Says Strike More Likely