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.
“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.
