Dockworkers at dozens of U.S. ports in the Eat and Gulf Coasts are digging in for a massive pay increase, seeking to flex their power in a strike that aims to strangle the flow of trade across much of the country, reports The Wall Street Journal (Oct. 2, 2024). “Nothing is going to move without us,” said the head of the longshoremen’s union. The union wants to raise the base hourly rate for its roughly 45,000 members to $69 from $39, a 77% pay increase. It argues that its members deserve a big raise after working through the pandemic.
Dockworkers typically earn a six-figure annual salary because of work rules and overtime requirements. More than half of dockworkers at the Port of New York and New Jersey earn more than $150,000, with 1/5 earning over $250,000. Republican lawmakers have stepped up calls for the administration to invoke federal law to keep the ports open. After wages are agreed, the two sides still need to bargain over thorny issues such as expanded use of automation, which the union wants to prohibit.
The walkout shuts down some of the country’s main gateways for imports of food, vehicles, heavy machinery, construction materials, chemicals, furniture, clothes and toys. Big retailers, with their busy fall shopping season just starting to kick in, say that for now they can withstand the slowdown because they brought in products earlier than usual this year and diverted other cargoes to West Coast ports in case of a strike. (Container imports into U.S. West Coast ports expanded 22% over last month).
But a walkout lasting a week or longer would push up shipping costs and might trigger product shortages. A strike lasting even one week would tie up ships for much longer periods, which could exacerbate shipping delays, eat up capacity and drive up freight rates, leading to logistical challenges for businesses relying on East Coast and Gulf ports. About 60% of containerized trade moves through these ports where dockworkers last year unloaded about $588 billion of imports.
One Florida importer that sells asparagus to supermarkets is having to fly in vegetables that would usually arrive by containership. It is adding 50 cents a pound to the prices to cover the higher airfreight costs.
Classroom discussion questions:
- What can supply chain managers do in a situation such as this?
- What are the major issues behind the strike?
Seems like 150 to 250 is pretty good, doesn’t it?
With a 62% pay increase over 6 years, it appears the strike is over ( with a Jan. 2025 verification date). The WSJ reported today that although East Coast wages are difficult to measure exactly ( they often are paid through local shipping associations), the average West Coast dockworker earned $233,000 last year.