ILA remains firm on its demand for a 61.5 percent pay increase and no automation

The number of ships waiting off the U.S. East Coast is growing quickly while a few have begun to divert as the International Longshoremen’s Association and the employers remain firm on their positions on the second day of the dockworkers' strike. Hopes for government intervention also continued to fade as other members of the Biden administration issued statements supporting the union and cautioning carriers.

In the first hours of the strike, the major carriers appeared to be taking a “wait and see” approach letting vessels mostly pile up at major ports. The backlog of vessels has built quickly over the past days according to Mirko Woitzik, Global Director of Intelligence for Everstream Analytics. Their analysis shows that the number of ships waiting grew roughly 20 percent in just the first 24 hours of the strike. Woitzik highlights it went from three vessels waiting on Sunday, to 31 on Monday, 38 yesterday the first day of the strike, and 45 as of Wednesday morning.

The number of containers now trapped offshore Woitzik calculates has surpassed 300,000 TEU having doubled in just the past two days. The expectation is that the volumes will continue to grow exponentially in the coming days. 

“The queue could easily grow to 100 by the end of the week as more containerships are on their way,” says Woitzik. Over 200 containerships with a total capacity of more than one million TEU will have arrived at U.S. ports by the end of the first week of the strike according to data from eeSea.

There are a few examples of ships already diverting while others appear to be lingering in Europe or away from the U.S. The NYK Demeter (4,888 TEU) for example omitted Port Everglades, Florida from its schedule with the carrier reporting it will instead discharge cargo in Halifax next Monday. Stadt Dresden (2.741 TEU) departed Norfolk shortly before the strike began and skipped a scheduled stop in Savannah, instead starting its return trip to the Mediterranean. Woitzik also highlights that there are more than a dozen vessels already in the anchorage off Freeport in the Bahamas.

“If the strike lasted more than one week with no resolution in sight this might change,” says Woitzik who expects more carriers would begin to divert.

The prospects for a quick resolution faded as the ILA reiterated that it rejected the offer made by the U.S. Maritime Alliance (USMX) which it said was for a nearly 50 percent wage increase. The union says the offer “fails to address the demands of our members adequately.”

Harold Daggett, President of the ILA, said on CNBC yesterday that the union is seeking a 61.5 percent wage increase. In a statement, the union also cited the “grueling six-year wage progression,” for members to attain top wages. They also noted that two-thirds of the dockworkers are “on call,” meaning they only work when a ship requires handling, and that members’ benefits are calculated off the hours worked.  

“Our members feel underappreciated, especially given the sacrifices they made during the pandemic, keeping ports open and the economy moving,” said Daggett. He also emphasizes that the ILA is “steadfastly against any form of automation – full or semi – that replaces jobs of historical work functions.

The Biden administration's support is likely emboldening the union. Acting Secretary of Labor Julie Su said she spent hours on the phone and in meetings urging the parties to find a way to reach a fair contract. She however echoed the union's position noting the large profits of the carriers, and the high pay of the CEOs, saying the employers “have refused to put an offer on the table that reflects workers’ sacrifice and contributions to their employer’s profits.”

“There is room for both companies and their workers to prosper,” said Su in a statement. “The parties need to get back to the negotiating table, and that must begin with these giant shipping magnates acknowledging that if they can make record profits, their workers should share in that economic success.”

CMA CGM was followed by Ocean Network Express (ONE) in declaring Force Majeure, while many of the carriers have announced additional surcharges related to the disruption from the strike. This also prompted cautions from President Joe Biden who said they would be watching for price-gouging.

“Our administration is calling on ocean carriers to withdraw their surcharges. No one should exploit a disruption for profit,” said Transportation Secretary Pete Buttigieg.

USMX issued a statement at the end of the day on Wednesday saying it would not agree to any preconditions to return to bargaining, but "we remain committed to bargaining in good faith to address the ILA’s demands and USMX’s concerns." The employers said their focus is on the steps required to start the negotiations. 

During the strike, limited port operations are continuing with the ILA promising not to impact military cargo or passenger shipping. Bulk cargo and liquid cargo are also not part of the ILA contract. Yesterday, there were some broader disruptions, such as a bulk cargo operation reporting its ILA crew did not report for work, but today warehouses were open in the Port of New York. Also, the auto processing centers in the Port of New York were open, but no RoRo traffic is moving because it is covered by the strike. 

https://maritime-executive.com/article/vessels-pile-up-and-divert-as-union-walks-on-second-day-of-ila-strike