Dug In Positions Point To Stevedore Strike In Mid-January
The MOC
By
John D. McCown
January 7, 2025
While uncertainty remains as to how it will eventually play out, it is now almost certain that a strike will start January 16, shutting down ports across the East and Gulf Coasts. The strike will likely last at least a week with the potential of becoming even more disruptive. Both sides are dug in and the usual labor/management dynamics that work to limit the length of a strike are absent.
The International Longshoremen’s Association (ILA) is the largest and oldest union representing American dockworkers and traces its origins back to 1864 when the first longshoreman’s union was formed in the port of New York. The term “longshoremen” goes back to early colonial days when a ship would arrive with critical goods from the Old World. Cries of ‘Men ‘long shore!’ would go out for men normally engaged in other occupations to unload the cargo. The term stevedore is a common synonym derived from the phonetic spelling of the Spanish word “estibador”, meaning a man who loads ships and stows cargo.
The ILA would grow to be one of the largest unions in the United States and by 1905 had over 100,000 members on all coasts including the Great Lakes. Tension among officials in 1936 resulted in the West Coast locals leaving the ILA and forming the International Longshore and Warehouse Union (ILWU). Today the ILA and the ILWU continue to load and discharge almost all cargo moving through U.S. ports. The ILA’s 47,412 members handle cargo on 36 ports on the East and Gulf Coasts as well as the Great Lakes. The ILWU’s 16,400 members handle cargo on 29 ports on the West Coast. The large majority of the employment hours for both unions is now related to container shipping, as has been the case for decades.
Contract negotiations with the ILA are handled through the United States Maritime Alliance, Ltd. (USMX), which represents the carriers, terminal operators and port authorities employing ILA members. The most recent six-year contract between the ILA and the USMX expired on September 30, 2024 and with no agreement, a strike occurred. After three days, the strike ended with a tentative wage agreement and an extension of the contract until January 15, 2025 to allow time for further negotiations. The wage agreement called for a $4 per hour increase each year in straight time pay over the six years of the new contract, from $39 to $63 per hour—a 61.5 percent increase. That represents a significant departure from the previous contract that saw wages increase $1 per year from $33 to $39 per hour, for a total increase of 18.2 percent.
Wages, however, are not the only issue of contention between the ILA and USMX and it is not even the most important issue. The critical issue is automation and concern on the part of the ILA that the introduction of more technology will reduce jobs. That concern is consistent with the longstanding ILA focus of maximizing employment hours. The ILWU has historically been more focused on keeping wage rates high. In 2023, the average straight time wage per hour at the ILWU was 35.5 percent higher than at the ILA. The table below compares annual increases (October 1 for ILA and July 1 for ILWU) and the resulting wage per hour from 2019 through 2027. ILA amounts beyond 2023 are based on the tentative agreement while ILWU amounts are based on the contract it entered into in 2022 that raises wages 31.6 percent over its six-year life.
Year
ILA Increase
ILA Wage
ILWU Increase
ILWU Wage
2019
1.00
35.00
1.31
43.49
2020
1.00
36.00
1.35
44.84
2021
1.00
37.00
1.39
46.23
2022
1.00
38.00
4.62
50.85
2023
1.00
39.00
2.00
52.85
2024
4.00
43.00
2.00
54.85
2025
4.00
47.00
2.00
56.85
2026
4.00
51.00
2.00
58.85
2027
4.00
55.00
2.00
60.85
If the tentative ILA agreement is finalized, by 2027 the difference in straight time pay will have narrowed with the ILWU only 10.6 percent higher compared to a 24.3 percent gap in 2019. The straight time wage rate is the starting point, but the overall amount is meaningfully higher due to overtime and work rules that increase the rate for workers in certain situations.
West Coast ports use more automation than the East and Gulf Coast ports. In the contract agreed to with the Pacific Maritime Association (PMA) in 2002 following an 11 day labor disruption that ended with President Bush invoking the Taft-Hartley Act, the ILWU agreed to allow the use of optical scanners. The PMA is analogous to the USMX and represents employers of ILWU members on the West Coast. That agreement paved the way for more digital technology and the 2008 ILWU agreement specifically allowed for “fully mechanized and robotic operated marine terminals”. In return, the ILWU received wage increases that were among the highest in organized labor. As an example of that and the impact of overtime and other work rules, while the average ILWU straight time wage was $51.85 in 2023, PMA data shows that the actual overall compensation was 60.5 percent higher at $83.22 per hour. With an average of 1,885 hours of work in 2023, the annual pay across all positions was $156,843.
My previous Center for Maritime Strategy article written just before the three day strike used overall union membership and typical income levels reported in the New York Times to broadly estimate labor cost per unit. Further research has resulted in more purposeful data with which to make relevant comparisons. One such comparison is the total stevedoring labor time per Twenty-foot Equivalent Unit (TEU) of containerized cargo at large ILA ports versus the same measure at large ILWU ports. This focuses on productivity differences among ports in the United States. The PMA 2023 annual report provides actual labor hours by port and my monthly reports on U.S. container volume allow the hours related to containers to be put into comparable form. The Shipping Association of New York and New Jersey (SANYNJ) is similar to USMX and represents members related to the port of New York. The SANYNJ 2023 annual report has detailed labor information detailing hours and wages for the largest ILA port. I have some information on other large ILA ports, but it needs more refinement and I will limit the detailed comparison to New York versus the West Coast ports in the table below.
ILA
ILWU
ILA-ILWU
ILA-ILWU
2023 Actual
New York
WC Top 5
Difference
% Difference
Total Labor Hours
13,693,433
26,401,366
-12,707,934
-48.1%
% Container
96.6%
89.3%
0
8.2%
Container Hours
13,230,409
23,571,234
-10,340,825
-43.9%
Inbound TEU’s
3,990,316
10,264,901
-6,274,585
-61.1%
Outbound TEU’s
1,284,967
4,264,300
-2,979,333
-69.9%
Total TEU’s
5,275,283
14,529,201
-9,253,918
-63.7%
Labor Hours Per:
Inbound TEU
3.32
2.30
1.02
44.4%
Total TEU
2.51
1.62
0.89
54.6%
Overall Wage/Hr
$55.59*
$83.22
-$27.63
-33.2%
Labor Cost Per:
Inbound TEU
$184.32
$191.09
-$6.77
-3.5%
Total TEU
$139.43
$135.01
$4.42
3.3%
Individual Workers
4,323
14,008
-9,685
-69.1%
Hours/Individual
3,168
1,885
1,283
68.1%
Income/Individual
$176,094
$156,843
$19,250
12.3%
*1.60497 times ST based on WC actual
It takes 44.4 percent more labor hours for each inbound load to New York than it did for inbound loads to West Coast ports. While the difference in total loads is more, the comparison to inbound loads is more relevant as it drives activity. I am confident that the other large ILA ports use less labor hours per inbound load than New York. Broader comparisons will be made as I refine the data. When New York is compared to Long Beach, the most productive ILWU port as my analysis shows 2.01 labor hours per inbound TEU, it takes 64.6 percent more labor hours. The lower overall New York wage where average straight time in 2023 was $34.64 due to lower rates for newer workers mitigates the productivity gap, but a 61.5 percent wage increase quickly reverses and expands that.
The key issue is the movement of containers horizontally in terminals after unloaded from the ship. In automated terminals, rail mounted gantry cranes stack and unstack boxes like an old jukebox moves records in and out of the player automatically. Robotic vehicles can move boxes from and to points alongside the ship. Truck drivers picking up loads go to the same location where the gantry crane brings the container to them. The rail mounted gantry cranes allow containers to be safely stacked higher than manually operated straddle carriers. Between that factor and the larger footprint required by manually-managed stacks for space for access lanes, automated facilities operate at a higher density per acre. This assists with managing the capacity caps at container ports we are approaching in the CMS article I wrote a year ago.
An International Association of Ports and Harbors study of worldwide terminal productivity surveyed 34 container terminals. The anonymous responses focused on basic numerical benchmarks, including TEU’s per stevedoring worker. One U.S. terminal, believed to be among the most productive, was included. In . Wage differences between the U.S. and those regions would only widen the gap in cost per TEU moved through the different ports.
These differences in overall cost—driven both by wages and level of automation—are central to the economics of moving cargo through American ports. While the ILA and USMX appear to have reached a deal on wages, that is only half of the equation, and the automation question remains outstanding in contract negotiations. The ILA opposes automation of ports for fear it will cost jobs, whereas USMX seeks to use automation to drive down costs as has been done in ports on the West Coast and around the world, increasing efficiency and throughput.
However, actual data shows employment growth even where technology has been introduced. A 2022 University of California study points to ILWU hours growing 31.5 percent from 2015 to 2021 at two automated terminals, or more than twice the 13.9 percent growth at less automated San Pedro Bay terminals. On the East Coast, the port of Norfolk, considered the most productive through use of semi-automation, reports that local ILA membership has increased 16.6 percent since 2017.
The ILA’s position in negotiations was strengthened when President-elect Donald Trump recently came out in support. They show no signs of agreeing to more automation. The carriers’ position looks to be just as resolute and is buoyed by the fact that a strike will increase pricing. Carriers have announced surcharges of $850 per TEU if there is a strike. The more pronounced pricing impact will be on rates in other shipping lanes as they are all effectively linked around the world. This fact was most recently shown by the Red Sea situation that produced $26.8 billion of net income in the third quarter of 2024 versus a small loss in the fourth quarter of 2023. My previous CMS article noted that this turnaround was the result of an 8 percent capacity shock imposed by the diversion of cargo ships from the Suez Canal to the longer Cape of Good Hope route. An ILA strike would shutdown ports linked to 16.2 percent of worldwide TEU-miles, producing capacity shock roughly twice that size.
Both sides appear girded for battle on the automation issue. On the ILA side, they are unwilling to accept practices now occurring on the West Coast. On the carrier side, they want some concessions for the wage increases that they are offering. The fact that carriers may get pricing increases in the event of a strike—potentially significant ones—gives them unique staying power. It is hard to overstate the adverse impact that a multi-week or longer strike would have. The vital importance from both economic and national security perspectives of free flowing container ports underscores our need for a coherent national port strategy.
John D. McCown is a Non-Resident Senior Fellow at the Center for Maritime Strategy. Mr. McCown has four decades of experience related to the shipping industry. His research, analysis and writings for the Center for Maritime Strategy focus on the intersection of merchant shipping and maritime commerce with national security.
The views expressed in this piece are the sole opinions of the author and do not necessarily reflect those of the Center for Maritime Strategy or other institutions listed.
Center for Maritime Strategy
By John D. McCown
While uncertainty remains as to how it will eventually play out, it is now almost certain that a strike will start January 16, shutting down ports across the East and Gulf Coasts. The strike will likely last at least a week with the potential of becoming even more disruptive. Both sides are dug in and the usual labor/management dynamics that work to limit the length of a strike are absent.
The International Longshoremen’s Association (ILA) is the largest and oldest union representing American dockworkers and traces its origins back to 1864 when the first longshoreman’s union was formed in the port of New York. The term “longshoremen” goes back to early colonial days when a ship would arrive with critical goods from the Old World. Cries of ‘Men ‘long shore!’ would go out for men normally engaged in other occupations to unload the cargo. The term stevedore is a common synonym derived from the phonetic spelling of the Spanish word “estibador”, meaning a man who loads ships and stows cargo.
The ILA would grow to be one of the largest unions in the United States and by 1905 had over 100,000 members on all coasts including the Great Lakes. Tension among officials in 1936 resulted in the West Coast locals leaving the ILA and forming the International Longshore and Warehouse Union (ILWU). Today the ILA and the ILWU continue to load and discharge almost all cargo moving through U.S. ports. The ILA’s 47,412 members handle cargo on 36 ports on the East and Gulf Coasts as well as the Great Lakes. The ILWU’s 16,400 members handle cargo on 29 ports on the West Coast. The large majority of the employment hours for both unions is now related to container shipping, as has been the case for decades.
Contract negotiations with the ILA are handled through the United States Maritime Alliance, Ltd. (USMX), which represents the carriers, terminal operators and port authorities employing ILA members. The most recent six-year contract between the ILA and the USMX expired on September 30, 2024 and with no agreement, a strike occurred. After three days, the strike ended with a tentative wage agreement and an extension of the contract until January 15, 2025 to allow time for further negotiations. The wage agreement called for a $4 per hour increase each year in straight time pay over the six years of the new contract, from $39 to $63 per hour—a 61.5 percent increase. That represents a significant departure from the previous contract that saw wages increase $1 per year from $33 to $39 per hour, for a total increase of 18.2 percent.
Wages, however, are not the only issue of contention between the ILA and USMX and it is not even the most important issue. The critical issue is automation and concern on the part of the ILA that the introduction of more technology will reduce jobs. That concern is consistent with the longstanding ILA focus of maximizing employment hours. The ILWU has historically been more focused on keeping wage rates high. In 2023, the average straight time wage per hour at the ILWU was 35.5 percent higher than at the ILA. The table below compares annual increases (October 1 for ILA and July 1 for ILWU) and the resulting wage per hour from 2019 through 2027. ILA amounts beyond 2023 are based on the tentative agreement while ILWU amounts are based on the contract it entered into in 2022 that raises wages 31.6 percent over its six-year life.
If the tentative ILA agreement is finalized, by 2027 the difference in straight time pay will have narrowed with the ILWU only 10.6 percent higher compared to a 24.3 percent gap in 2019. The straight time wage rate is the starting point, but the overall amount is meaningfully higher due to overtime and work rules that increase the rate for workers in certain situations.
West Coast ports use more automation than the East and Gulf Coast ports. In the contract agreed to with the Pacific Maritime Association (PMA) in 2002 following an 11 day labor disruption that ended with President Bush invoking the Taft-Hartley Act, the ILWU agreed to allow the use of optical scanners. The PMA is analogous to the USMX and represents employers of ILWU members on the West Coast. That agreement paved the way for more digital technology and the 2008 ILWU agreement specifically allowed for “fully mechanized and robotic operated marine terminals”. In return, the ILWU received wage increases that were among the highest in organized labor. As an example of that and the impact of overtime and other work rules, while the average ILWU straight time wage was $51.85 in 2023, PMA data shows that the actual overall compensation was 60.5 percent higher at $83.22 per hour. With an average of 1,885 hours of work in 2023, the annual pay across all positions was $156,843.
My previous Center for Maritime Strategy article written just before the three day strike used overall union membership and typical income levels reported in the New York Times to broadly estimate labor cost per unit. Further research has resulted in more purposeful data with which to make relevant comparisons. One such comparison is the total stevedoring labor time per Twenty-foot Equivalent Unit (TEU) of containerized cargo at large ILA ports versus the same measure at large ILWU ports. This focuses on productivity differences among ports in the United States. The PMA 2023 annual report provides actual labor hours by port and my monthly reports on U.S. container volume allow the hours related to containers to be put into comparable form. The Shipping Association of New York and New Jersey (SANYNJ) is similar to USMX and represents members related to the port of New York. The SANYNJ 2023 annual report has detailed labor information detailing hours and wages for the largest ILA port. I have some information on other large ILA ports, but it needs more refinement and I will limit the detailed comparison to New York versus the West Coast ports in the table below.
ILA
*1.60497 times ST based on WC actual
It takes 44.4 percent more labor hours for each inbound load to New York than it did for inbound loads to West Coast ports. While the difference in total loads is more, the comparison to inbound loads is more relevant as it drives activity. I am confident that the other large ILA ports use less labor hours per inbound load than New York. Broader comparisons will be made as I refine the data. When New York is compared to Long Beach, the most productive ILWU port as my analysis shows 2.01 labor hours per inbound TEU, it takes 64.6 percent more labor hours. The lower overall New York wage where average straight time in 2023 was $34.64 due to lower rates for newer workers mitigates the productivity gap, but a 61.5 percent wage increase quickly reverses and expands that.
The key issue is the movement of containers horizontally in terminals after unloaded from the ship. In automated terminals, rail mounted gantry cranes stack and unstack boxes like an old jukebox moves records in and out of the player automatically. Robotic vehicles can move boxes from and to points alongside the ship. Truck drivers picking up loads go to the same location where the gantry crane brings the container to them. The rail mounted gantry cranes allow containers to be safely stacked higher than manually operated straddle carriers. Between that factor and the larger footprint required by manually-managed stacks for space for access lanes, automated facilities operate at a higher density per acre. This assists with managing the capacity caps at container ports we are approaching in the CMS article I wrote a year ago.
An International Association of Ports and Harbors study of worldwide terminal productivity surveyed 34 container terminals. The anonymous responses focused on basic numerical benchmarks, including TEU’s per stevedoring worker. One U.S. terminal, believed to be among the most productive, was included. In . Wage differences between the U.S. and those regions would only widen the gap in cost per TEU moved through the different ports.
These differences in overall cost—driven both by wages and level of automation—are central to the economics of moving cargo through American ports. While the ILA and USMX appear to have reached a deal on wages, that is only half of the equation, and the automation question remains outstanding in contract negotiations. The ILA opposes automation of ports for fear it will cost jobs, whereas USMX seeks to use automation to drive down costs as has been done in ports on the West Coast and around the world, increasing efficiency and throughput.
However, actual data shows employment growth even where technology has been introduced. A 2022 University of California study points to ILWU hours growing 31.5 percent from 2015 to 2021 at two automated terminals, or more than twice the 13.9 percent growth at less automated San Pedro Bay terminals. On the East Coast, the port of Norfolk, considered the most productive through use of semi-automation, reports that local ILA membership has increased 16.6 percent since 2017.
The ILA’s position in negotiations was strengthened when President-elect Donald Trump recently came out in support. They show no signs of agreeing to more automation. The carriers’ position looks to be just as resolute and is buoyed by the fact that a strike will increase pricing. Carriers have announced surcharges of $850 per TEU if there is a strike. The more pronounced pricing impact will be on rates in other shipping lanes as they are all effectively linked around the world. This fact was most recently shown by the Red Sea situation that produced $26.8 billion of net income in the third quarter of 2024 versus a small loss in the fourth quarter of 2023. My previous CMS article noted that this turnaround was the result of an 8 percent capacity shock imposed by the diversion of cargo ships from the Suez Canal to the longer Cape of Good Hope route. An ILA strike would shutdown ports linked to 16.2 percent of worldwide TEU-miles, producing capacity shock roughly twice that size.
Both sides appear girded for battle on the automation issue. On the ILA side, they are unwilling to accept practices now occurring on the West Coast. On the carrier side, they want some concessions for the wage increases that they are offering. The fact that carriers may get pricing increases in the event of a strike—potentially significant ones—gives them unique staying power. It is hard to overstate the adverse impact that a multi-week or longer strike would have. The vital importance from both economic and national security perspectives of free flowing container ports underscores our need for a coherent national port strategy.
John D. McCown is a Non-Resident Senior Fellow at the Center for Maritime Strategy. Mr. McCown has four decades of experience related to the shipping industry. His research, analysis and writings for the Center for Maritime Strategy focus on the intersection of merchant shipping and maritime commerce with national security.
The views expressed in this piece are the sole opinions of the author and do not necessarily reflect those of the Center for Maritime Strategy or other institutions listed.