Dockworkers may have the negotiating advantage in their strike against US ports

PHILADELPHIA (AP) - With 45,000 longshoremen at 36 U.S. ports from Maine to Texas on strike for the first time in decades, experts say the workers may wield the upper hand in their standoff with port operators over wages and the use of automation.

Organized labor enjoys rising public support and has achieved a string of recent victories in other industries, with the backing of the pro-union administration of President Joe Biden. Their negotiating stand is likely further strengthened from having the nation’s supply chain of goods under pressure from the effects of Hurricane Helene, which has coincided with the peak shipping season for holiday goods.

The union is also pointing to record profits the shipping companies have made, in part because of shortages resulting from the pandemic, and to a more generous contract that West Coast dockworkers achieved last year. The longshoremen’s workloads also have increased, and the effects of inflation have eroded their pay in recent years.

In addition, commerce into and out of the United States has been growing, playing to the union's advantage. Further enhancing its leverage is a still-tight job market, with workers in some industries demanding and in some cases receiving a larger share of companies' outsize profits.

"I think this work group has a lot of bargaining power," said Harry Katz, a professor of collective bargaining at Cornell University. "They're essential workers that can't be replaced, and also the ports are doing well."

The dockworkers’ strike, their first since 1977, could snarl supply chains and cause shortages and higher prices if it stretches on for more than a few weeks. Beginning after midnight, the workers walked picket lines Tuesday and carried signs calling for more money and a ban on automation that could cost workers their jobs.

Experts say consumers won't likely notice shortages for at least a few weeks, if the strike lasts that long, though some perishable items such as bananas could disappear from grocery stores. In anticipation of a strike, most major retailers stocked up on goods, moving ahead shipments of holiday gift items.

The strike, coming weeks before a tight presidential election, could also become a factor in the race if shortages begin to affect many voters. Pressure could eventually grow for the Biden administration to intervene to try to force a temporary suspension of the strike.

Little progress was reported in the talks until just hours before the strike began at 12:01 a.m. The U.S. Maritime Alliance, the group negotiating for the ports, said both sides did budge from their initial positions. The alliance offered 50% raises over the six-year life of the contract. Comments from the union’s leadership had briefly suggested a move to 61.5%, but the union has since signaled that it’s sticking with its initial demand for a 77% pay increase over six years.

In early picketing, workers outside the Port of Philadelphia walked in a circle and chanted, "No work without a fair contract." The union posted message boards on the side of a truck reading: "Automation Hurts Families: ILA Stands For Job Protection."

Boise Butler, president of the union local, asserted that the workers want a fair contract that doesn't allow for the automation of their jobs. The shipping companies, he argued, made billions during the pandemic by charging high prices.

"Now,” Butler said, "we want them to pay back. They're going to pay back."

And in New Orleans, Henry Glover Jr., a fourth generation dockworker who is president of the union local, said he can recall the days when longshoremen unloaded 150-pound sacks of sugar by hand. He acknowledges that machinery has made the job easier, but he worries that the ports need fewer people to handle the equipment.

"Automation could be good, but they're using it to kill jobs," Glover said. "We don't want them to implement anything that would take our jobs out."

Butler and Glover warned that the union members plan to strike for as long as they need to achieve a favorable deal.

"This is not something that you start and you stop," Butler said. "We’re not weak," he added, pointing to the union’s vital importance to the nation’s economy.

William Brucher, an assistant professor of labor studies and employment relations at Rutgers University, explained that "this is a very opportune time" for striking workers.

The contract agreement made last year with West Coast dockworkers, who are represented by a different union, shows that "higher wages are definitely possible" for the longshoremen and has enhanced their bargaining power, Brucher said.

Under the Taft-Hartley Act, Biden could seek a court order for an 80-day cooling-off period that would end the strike at least temporarily, but he has told reporters that he wouldn't take that step. The administration could risk losing union support if it exercised such power, which experts say could be particularly detrimental for Democrats ahead of next month’s election.

On Tuesday, the White House continued to ask the alliance to negotiate a fair contract that reflects the longshoremen's contribution to the economy.

"As our nation climbs out of the aftermath of Hurricane Helene,” Biden said in a statement, “dockworkers will play an essential role in getting communities the resources they need. Now is not the time for ocean carriers to refuse to negotiate a fair wage for these essential workers while raking in record profits."

Ben Nolan, a transportation analyst with Stifel, said the administration isn't likely to intervene until consumers start to see empty shelves or can't find critical goods like medicines.

"Medications and other things come in on containers," Nolan said. "I think if the administration wanted to have a reason to get involved, it's stuff like that.”

Leading up to the strike, the union’s opening offer in the talks was for a 77% pay raise over the six-year life of the contract, with President Harold Daggett saying it's necessary to make up for inflation and years of small raises. The union members earn a base salary of about $81,000 per year, but some can pull in over $200,000 annually with significant amounts of overtime.

On Monday evening, the alliance said it had increased its offer to 50% raises over six years and pledged to keep limits on automation that are in place from the old contract. The alliance also said its offer tripled employer contributions to retirement plans and strengthened health care options.

On Tuesday morning, Daggett had told CNBC that the union was pushing for a 61.5% pay increase. But the union later signaled that it was sticking with its original demand for a 77% increase over six years.

Still, the union is demanding a complete ban on automation. How far apart the two sides are on that issue remains unclear.