In early October, the International Longshoremen’s Association (ILA) and the U.S. Maritime Alliance (USMX) ended a three-day strike at East and Gulf Coast ports, after agreeing to a temporary deal to extend the union’s contract through January 15, 2025. But as negotiations on a longer-term contract continue in the meantime, the two sides still have a ways to go on the thorny subject of automation.
During the lead-up to the October work stoppage, the ILA made it clear that it had two priorities. First, the union wanted explicit guarantees that East and Gulf Coast ports wouldn’t implement automated technology over the life of a new agreement. Second, the ILA was adamant that it wouldn’t agree to anything less than a substantial wage increase for dockworkers. The latter was taken care of in the temporary deal, with the USMX approving a 62% pay bump over the next six years. When it comes to automation, though, the issue remains a point of contention.
“My observation is that the ILA’s feet are dug deep in the sand on this,” says Margaret Kidd, a program director and associate professor on supply chain and logistics technology at the University of Houston.
Read More: Strike at U.S. Ports Brings Debate Over Automation Front and Center
Throughout the negotiation process, the ILA has asserted that automated technology will ultimately directly lead to a loss of jobs at ports. That being said, Kidd notes that virtually every modern industry in the U.S. has had to embrace new technology at some point. It’s at American ports, though, where she says that the hesitance surrounding automation has left the country decades behind shipping hubs in Europe and Asia.
“If we look at American competitiveness, we are the weak link in the global supply chain,” Kidd says. “We can’t do the same job for 130 years and not change the technology we use to increase our efficiency and effectiveness.”
While she points out that it’s reasonable for the ILA to be concerned about what automation might mean for their jobs in the years to come, not all automated technology involves a one-for-one swap of a machine-based task for a human-based one. That includes remotely-operated ship-to-shore cranes that can be controlled by a worker in a different location, automated straddle carriers that lift and stack containers with the help of an operator, and driverless guided vehicles that still require humans to monitor and manage them on a day-to-day basis.
“I think there’s a middle of the road,” Kidd says. “There’s this human element that’s very important, and it’s critical that that we look at up-skilling and providing training.”
A Looming Deadline
If the ILA and USMX fail to come to a deal by January 15, East and Gulf Coast ports would be looking at their second strike in three months. The first time around, retailers spent months hurrying through their shipments prior to the October work stoppage, one of several factors credited with moving the peak cargo season up from August-October to May-August. Because of that, impacts from that first, three-day strike were minimal, despite it coming at the start of the period where U.S. consumers start their holiday shopping.
A second strike would create its own set of challenges, given that Chinese Lunar New Year — where the bulk of factories in China close down and production slows — falls on January 29. Ahead of that, importers should already start preparing for the possibility of a port strike overlapping with the holiday
says Container xChange CEO Christian Roeloffs.
“Container traders should begin contingency planning now,” he advises. “This includes securing inventory, diversifying supplier networks, and considering alternative shipping routes to mitigate delays. Proactive steps like these will be crucial for navigating the challenges anticipated in January.”
Given that the ILA and USMX came to terms on wage increases in October, Kidd says that there’s a chance that there could be “a little wiggle” room on negotiations moving forward, too. “If I was on the ILA team negotiating,” she posits, “I would be negotiating for guaranteeing a specific number of jobs, and then this training and up-skilling (on automation) to be that human element, because technology doesn’t operate in a silo — you still need humans.” There’s also a chance that the two parties agree to kick the can down the road again with another temporary agreement, but that would lead to even more uncertainty ahead of another potential deadline for a strike.
“It’s in everyone’s interest that this be resolved, that there be some stability,” Kidd says.
