Maersk is at the center of a pending strike that could significantly disrupt US East and Gulf Coast ports ahead of back-to-school and the holiday season. The International Longshoreman’s Association (ILA) represents union workers at the East and Gulf Coast ports and suspended labor contract talks earlier in the month with the US Maritime Alliance (USMX) over a dispute with Maersk’s presumed implementation of an autonomous gate system in the Port of Mobile, Alabama. 

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The ILA claims that Maersk’s incorporation of an automated gate violates the coast-wide Master Contract. Once again, the ILA’s long-standing concern that automation could result in the potential elimination of ILA jobs is at the forefront. Meanwhile, Maersk asserts that it remains in full compliance with the contract, and the standoff has paused contract negotiations for the time being. 

A potential strike could affect operations across roughly 36 ports between Maine and Texas. The ILA represents 85,000 port workers in Gulf Coast ports and along the eastern seaboard, and the master contract is set to expire on September 30th. The union’s chief negotiator, Harold J. Daggett, has maintained his stance on union opposition to port automation coupled with exclusive port contracts for union members. 

If history is any indication, unions and ports tend to reach agreements. Yet, the ILA is seeking substantial wage increases in excess of the 32% increase it had secured for West Coast ports last year. In July, for example, the Great Lakes District of the union closed an impressive 40% wage and benefit increase for its new six-year contract. 

In a year where global shipping had not been decimated by man-made hostilities, drought conditions, and spiking container rates, a looming strike would have more shippers spooked. But this year all of the above are front and center, and shippers are accustomed to the chaos. A strike would not occur until October, and while there has been a moderate shift in flows from the east to west coast ports such as Los Angeles and Long Beach, it’s only been in the 2% to 5% range. Container throughput in Los Angeles was down 3% in May (year on year), and volumes at Long Beach had dropped 8.2%.