Joe Biden is watching out for 'price gouging' from shipping companies as dockworkers strike
President Joe Biden on Tuesday signaled his support for the tens of thousands of dockworkers on strike at U.S. ports and issued a warning to shipping companies.
“Collective bargaining is the best way for workers to get the pay and benefits they deserve,” Biden said in a statement, adding that he has “urged” the United States Maritime Alliance (USMX) to offer the International Longshoremen Association’s (ILA) 45,000 members a “fair deal.”
The ILA went on strike early Tuesday morning after its contract with USMX, the group that represents shipping companies, terminal operators, and port associations, expired. The union is pushing for protection against automation, new technology devices in terminals, and wage hikes.
Between 2018 and 2024, employees received a $1 per hour increase to their wages, to a maximum of $38 per hour — about $79,000 annually on a 40-hour work week — while new employees started at $20 an hour. The ILA rejected the alliance’s latest offer, which would boost wages by almost 50%, triple employer contributions to retirement plans, and retain the current language around automation.
“We are now demanding $5 an hour increase in wages for each of the six years of a new ILA-USMX Master Contract,” ILA President Harold Daggett said in a statement Tuesday. “Plus, we want absolute airtight language that there will be no automation or semi-automation, and we are demanding all Container Royalty monies go to the ILA.”
As a strike loomed closer and companies began worrying about taking hits to their profits, shipping companies began advising customers on ways to prepare their operations. Several firms — including members of USMX — also began alerting customers of new surcharges on their services to lessen the blow of the walkouts.
Hapag-Lloyd plans to implement a “work interruption destination surcharge” for imports to the U.S. Gulf and East Coasts on Oct. 18. Maersk has issued a similar surcharge that will go into effect on Oct. 21, depending on the impact of the potential disruption to the supply chain. Another major player, CMA GCM, announced on Sept. 17 a series of changes to its charges for the ports, which would come into effect on Oct. 11.
All three are members of the USMX and owned by foreign companies. Maersk in particular has been bashed by the ILA, which accused firms adding surchages of “killing the customers.”
“My Administration will be monitoring for any price gouging activity that benefits foreign ocean carriers, including those on the USMX board,” Biden said Tuesday.
Although the ILA’s walkouts would never necessarily be welcome by the U.S. economy, the timing is worse than usual. Hurricane Helene has carved out a path of destruction in the U.S. across more than 600 miles, stretching from Florida to Kentucky.
“As our nation climbs out of the aftermath of Hurricane Helene, dockworkers will play an essential role in getting communities the resources they need,” Biden said. “Now is not the time for ocean carriers to refuse to negotiate a fair wage for these essential workers while raking in record profits.”
Ports and facilities handling approximately 51% of the nation’s overall port capacity are affected by the walkouts, according to the MITRE Corporation. Each day of the walkouts may cost anywhere between $540 million and $5 billion in economic damage, according to various estimates. The agricultural, retail, and automotive sectors are expected to be hit particularly hard.
Although ending the strike ultimately depends on the ILA and USMX coming to an agreement, Biden could invoke the Taft-Hartley Act and impose an 80-day period where workers go back to work while negotiators flesh out a deal. However, the president has said he won’t invoke the act, keeping in line with the ILA’s — and at least one supportive union’s — demands.
