The International Longshoremen’s Association (ILA) has suspended negotiations with the United States Maritime Alliance (USMX) over a new labor contract, escalating the risk of strikes at East Coast and Gulf Coast ports. The ILA, representing 85,000 union workers, halted talks after discovering that APM Terminals (APMT) and Maersk were using automated technology to process trucks at port terminals without union labor.

The ILA highlighted the use of an ‘auto-gate’ system at the Port of Mobile, Alabama, and suggested that similar technology is in use at other ports, according to a report by CNBC. ILA President Harold J. Daggett condemned the use of automation, calling it a breach of their coast-wide Master Contract with USMX.

“This is a clear violation of our agreement with USMX, and we will not tolerate it any longer,” Daggett stated. “There’s no point trying to negotiate a new agreement when one of its major companies continues to violate our current agreement with the aim of eliminating ILA jobs through automation.”

A Maersk spokesman refuted the ILA’s claims, asserting that APMT is “in full compliance with the ILA/USMX Master Contract” and expressed disappointment over the ILA’s public disclosure of selective negotiation details.

The master contract between the ILA and USMX, covering terminal operators and ocean carriers, is set to expire on September 30. The ILA had set May 17 as the deadline for local contracts to be settled to facilitate the overall contract negotiations. However, the decision to cease talks arose from issues related to the “ongoing negotiations of local agreements under the coast-wide Master Contract.”

ILA President Daggett has been vocal about securing a favorable economic deal for union members, opposing port automation, and ensuring exclusive contracts for union workers. Despite a history of concessions and agreements between the ILA and USMX, concerns about potential strikes are heightened, especially as cargo orders begin to shift back to West Coast ports ahead of the peak shipping season.

Previous disruptions, such as the 13-day strike at ILWU Canadian West Coast Ports, left over $12 billion in trade stranded and shifted cargo flow to East Coast ports. Port insiders indicate that the ILA is aiming for a pay increase larger than the 32% secured by the ILWU in its recent six-year deal, reported CNBC.

The ILA’s stance and the suspension of talks underscore the fragile state of labour relations at key U.S. ports, with significant implications for the shipping and logistics industry as the threat of strikes looms.