The ILA Could Strike Again in January: What You Need to Know

In October, tens of thousands of International Longshoremen’s Association (ILA) members ended their three-day strike on the East and Gulf Coast ports. The decision to end the strike was a welcome development for the workers, small business owners, and communities across America that rely on the ports for vital goods. 

The ILA and U.S. Maritime Alliance (USMX) agreed to extend the existing contract through mid-January, while continuing to negotiate on a long-term agreement. That means the ILA could go on strike again in January if an agreement can’t be reached. 

In order to ensure the best outcome for workers, consumers, and business owners across the U.S., it's important to understand the issues and the stakes.  

The Impact of a Second Strike

The East and Gulf Coast ports service more than half of U.S. imports, and a second strike could have devastating impacts. 

Fast Facts 

• For a strike of more than a few days, consumers could see shortages and price increases on items like groceries, clothing, and electronics, affecting workers and families across America. 
• Every day of a strike results in nearly a week of disruptions to the economy. Economists believe a similar disruption in 2002 cost the economy $1 billion per day, and it took six months for the economy to recover.
• Remember: In September, JPMorgan Chase calculated the ILA strike would cost the economy between $3.8 billion to $4.5 billion per day.

• Small businesses would face the brunt of the economic fallout as they are already operating within smaller margins, a tighter labor market, and higher costs from inflation.  

• Zoom out: A strike organized by the International Association of Machinists and Aerospace Workers (IAM) at Boeing forced suppliers to implement temporary furloughs, showcasing the devastating impacts of similar strikes deep in the supply chain. 

• Because efficient ports are essential for maintaining America's competitiveness in a rapidly evolving global market, strikes and the poor state of many U.S. ports pose serious risks to the country's economic leadership.

• Yes, and: Modern ports are not just economic engines, they are critical nodes in defense and emergency preparedness.  

The ILA, which ended a three-day strike in October after reaching an agreement in principle to a nearly 63% pay increase and to give more time to finalize a new labor contract. However, the ILA quickly walked out after resuming negotiations with USMX in November, highlighting a critical issue: Union bosses are employing extreme tactics without considering the broader economic impact – even on their own membership.

What are the Issues?

Modernization 

Infrastructure modernization is the line in the sand.  

Every day, U.S. ports move thousands of containers holding everything from electronics to food products for Americans and American businesses. Over time, the number of containers has grown with our economy yet the infrastructure responsible for moving these containers is no longer adequate to keep up with this growing demand. Indeed, The World Bank Group and IHS Markit reports that other countries are 40% more productive than most ports in the U.S., which doesn’t even have a port ranked in the top 50 for productivity in the world. 

Most major East and Gulf Coast ports – like the Ports of Baltimore, New York, and New Jersey – reside in the center of major cities, where there is no available land to build new capacity. The only way for these ports to handle more volume, therefore, is to modernize their operations, e.g., using technology to help increase the velocity of cargo through their existing footprints.  

The ILA believes these modernizations will lead to job losses for their members. But, the ILA’s previous contract allowed for modernization and included guarantees that no jobs would be lost to these improvements. Further, the ports are not seeking to eliminate jobs. Instead, they want to continue what is already agreed to and in use at West Coast ports as well as other ports of the world. 

Unfortunately, the ILA is demanding the ports drop the existing modernization allowances as part of its negotiations. This would prevent ports from using technology already in use (and permitted by the current contract). It would also reduce capacity at many ports, ultimately blocking growth in union jobs and union wages across all sectors. 

This is critical at a time when American-made goods are challenged on the global stage. 

 Ineffective ports mean we are pacing behind global adversaries in producing and selling American-made goods. This hurts not only small and medium-sized businesses in the U.S., but also American competitiveness on the global stage. 

“Unfortunately, the ILA is insisting on an agreement that would move our industry backward by restricting future use of technology that has existed in some of our ports for nearly two decades – making it impossible to evolve to meet the nation’s future supply chain demands,” USMX said. Adding "What we need is continued modernization that is essential to improve worker safety, increase efficiency in a way that protects and grows jobs, keeps supply chains strong, and increases capacity that will financially benefit American businesses and workers alike.”

Pay

Pay was agreed to in the fall but is contingent on a full contract being ratified by Jan. 15, 2025.  

Port operators want to pay workers a fair wage. Last fall, the ILA demanded a 77% pay increase over six years and reportedly rejected a 40% increase before walking out when its existing contract expired Sept. 30. 

All ports are open 24 hours, but any ILA member working outside a “standard” daytime shift is paid overtime – 70% of all hours worked. A sample of average pay at key ILA ports: 

• NY/NJ: $350,000 

• Norfolk: $200,000 

• Savannah: $180,000 

• Houston: $170,000 

At the current offer, wages for full-time workers in NY/NJ would be $500,000. 

In addition, dock workers receive full coverage healthcare, with no member premium. Last fall, the ILA demanded a 77% pay increase over six years and reportedly rejected a 40% increase before walking out when its existing contract expired Sept. 30.    

What's at Stake?

Walking away from the negotiating table is a reckless gamble with America's economic future.  

Leaders are deploying extreme tactics, and ILA President Harold Daggett, who makes more than $900,000 a year, has boasted that he would “cripple” the economy with a protracted strike to achieve the ILA’s goals – regardless of the impact on small businesses, retail workers or construction workers, any of which might lose wages or jobs because of the downstream effects of a strike. 

That ripple effect, fueled not only by a breakdown in the supply chain but also by the lack of workers patronizing businesses that support the docks, would be felt by every American business and family. 

These ports collectively handle more than 68% of all containerized exports and 56% of imports for the nation, with a daily trade value exceeding $2.1 billion. The National Retail Federation recently noted that economists believe a similar disruption in 2002 cost the economy $1 billion per day and it took six months for the economy to recover.   

A high-level analysis of economic impacts by MITRE Corporation found that an ILA strike lasting 30 days would have an economic impact of:  

• $640 million per day at the New York/New Jersey ports.
• $600 million per day at Virginia ports.
• $51 million per day in exports at Houston ports.
• $41.5 million per day in imports at Houston ports.

What We're Saying

• “The apparent disregard for the broader impact of strikes on the economy suggests a troubling disconnect between union leadership and the interest of most American workers,” Neil Bradley, U.S. Chamber Chief Policy Officer, in a RealClearPolicy op-ed.
• “The union president made clear his strategy: He said he wanted to ‘cripple’ the United States economy. I don’t think any of us find it acceptable that one union boss can try to cripple the U.S. economy as a means to try and achieve their ends,” Neil told Fox News.
• “We are hearing from everybody who are incredibly concerned. Everyone from the ocean carries, to retailers, farmers, and even electronics manufacturers and providers,” I said, speaking with BBC News.

About the authors

John Drake

John Drake is responsible for representing the business community on transportation, infrastructure, and supply chain issues before Congress, the administration, the media, the business community, and other stakeholders.

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