U.S. supply chains may face a test to start 2025 as dockworkers and their employers restart contract negotiations. Automation will take center stage as the International Longshoremen’s Association (ILA) and the United States Maritime Alliance (USMX) reconvene at the bargaining table.
The ILA negotiated a 62% raise over the next six years after a short-lived three-day strike in October. With conversations over wages in the rearview mirror, automation will be the focus of talks which begin on Tuesday, Jan. 7. If the two sides fail to come to terms by Jan. 15, more than 45,000 dockworkers could return to the picket line.
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The ILA called for a total ban on automation amid the first labor dispute. Automation has been so contentious that the union reportedly walked out of negotiations in November because it says the USMX was “pushing automation and semi-automation language in its Master Contract proposals that will eliminate ILA jobs.”
“They want to go automation,” ILA President Harold J. Daggett said in a video posted to the union’s YouTube account in September. “They want more money now. ‘Get rid of these men. We don’t need them no more.’ It’s a big change going on.”
“This is kind of the conundrum that we’re in,” Patrick Penfield, a professor of supply chain practice at Syracuse University, told Straight Arrow News prior to October’s strike. “Ideally, we should be automating to streamline operations, to be able to move things in and out. But unfortunately, automation does come at a price from a job standpoint, and there will be less jobs on the ports if you automate. This is kind of the sticking point.”
The union has found an ally in President-elect Donald Trump, who met with leadership in December.
“I’ve studied automation, and know just about everything there is to know about it,” Trump wrote on Truth Social. “The amount of money saved is nowhere near the distress, hurt, and harm it causes for American Workers, in this case, our Longshoremen.”
But Penfield says the U.S. is lagging behind the rest of the world when it comes to automation at its ports.
Global rankings have the busiest U.S. ports ranked near the bottom of the pack when it comes to efficiency. There’s not a single U.S. port in the S&P Global ranking’s top 50.
“Sadly, the United States has some of the worst ports in regards to automation,” Penfield said. “You could even consider some of our ports as good as a third-world country’s ports, just because [there’s] not a lot of automation there.”
Penfield said that if dockworkers were to take to the picket line for an extended period of time, it wouldn’t take long for Americans to feel it.
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“So at first it’ll be minimal, but as it progresses, it’ll get worse,” he said. “Every day there’s a strike, that’s about five days of supply chain disruptions. But I’d say after a week, then we’re going to start to feel some issues and problems for companies.”
Penfield said a lot of food comes through East Coast ports, and with a prolonged strike, companies would have to fly food in, raising prices and leading to shortages.
Tags: Cargo ships, Donald Trump, International Longshoremen’s Association, Labor, Strike, Supply chain, Unions
[Simone Del Rosario]
The fate of U.S. supply chains hangs in the balance to kick off 2025.
Contract talks restart Tuesday for the International Longshoremen’s Association, which represents dockworkers up and down the East Coast, and the United States Maritime Alliance, repping their employers.
If the two sides don’t come to terms by January 15, more than 45,000 dockworkers could hit the picketline … again.
The talks are months in the making after the two sides ended a short-lived three-day strike back in October. At the time, the longshore workers agreed to a 62% pay raise over the next six years.
The wage issue is resolved for the time being, which means automation will be the focus of these discussions.
Patrick Penfield:
“Yeah, I think that the dilemma that we have is that the Longshoremen, they’ve always been a strong union, and so they realize that if you automate, you’re going to take away their jobs.”
Simone Del Rosario:
Longshore workers have called for a total ban on automation. The issue is so contentious the ILA reportedly walked out of negotiations back in November, because the Maritime Alliance was QUOTE “pushing automation and semi-automation language in its Master Contract proposals that will eliminate ILA jobs.”
Harold Daggett:
They want to go automation. They want more money now. Get rid of these men. We don’t need them. No more. It’s a big change going on. I’ve been fighting automation for years. They destroyed la they put a fully automated term out there at Mercer line, 800 longshoremen lost their jobs. If it was up to them, they would like to see everybody lose their jobs.
Simone Del Rosario:
Despite these concerns, employers have promised no jobs would be cut due to automation.
Patrick Penfield:
this is kind of the conundrum that we’re in. You know, ideally we should be automating to streamline operations, to be able to move things in and out. But unfortunately, automation does come at a price from a job standpoint, and there will be less jobs on the ports if you automate. And so this is kind of the sticking point.
Simone Del Rosario:
The union has found an ally in President-elect Donald Trump, who met with leadership in December and shared his pro-labor views.
“I’ve studied automation, and know just about everything there is to know about it,” Trump wrote on Truth Social in December. “The amount of money saved is nowhere near the distress, hurt, and harm it causes for American Workers, in this case, our Longshoremen.”
Supply chain expert Patrick Penfield told us in September the U.S. is woefully behind when it comes to automating its ports.
And global rankings have the busiest U.S. ports ranked near the bottom of the pack when it comes to efficiency. There’s not a single U.S. port in S&P Global ranking’s top 50.
Patrick Penfield:
Sadly, the United States has some of the, the worst ports in regards to automation. You could even consider some of our ports of Thor, you know, as good as the third world countries ports, just because (really) not a lot of automation there. Yeah,
Simone Del Rosario:
If the longshore workers do strike again, the backlog at ports will quickly build. Eventually that backlog would have a ripple effect throughout industries and ultimately, Americans’ wallets.
Patrick Penfield:
So you’ll see again, congestion. So rates will go up. You’re going to see issues with food, because, you know, there’s a lot of food that goes through the East Coast ports, so in order to get that food, you’re going to have to air it in. And so if you air anything these days, it’s going to cost a lot more money. And so that’s kind of what you’ll see, is you’ll see prices go up. At first you’ll start to see stuff. There’ll be some availability issues, where you won’t see as much food as you do, like bananas and seafood. And then eventually, you know, the food retailers will bring that stuff in via air, and then you’ll start to see significant price increases.
Simone Del Rosario:
Again, the deadline to avoid this calamity is Jan. 15, just five days before Trump’s inauguration. To stay on top of updates to this story, download the Straight Arrow News app and enable notifications.
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