US East Coast Port Strike Enters Second Day as Shipping Lines Call Force Majeure
Shipping lines are starting to declare force majeure as a strike at ports on the US East and Gulf coasts enters its second day. Hopes that the employer association USMX could persuade the government to intervene and end the economically damaging strike were dashed when the White House sided with the union. President Biden urged both parties to resume collective bargaining, emphasizing that workers deserve fair pay and benefits.
In his statement, Biden called on USMX, which represents foreign-owned carriers, to present a fair offer to the International Longshoremen’s Association (ILA) workers. He highlighted that ocean carriers have made record profits since the pandemic, with some exceeding 800 % of their pre-pandemic profits, while executive compensation and shareholder returns have also increased significantly. He stressed that dockworkers, who kept ports operational during the pandemic, deserve a meaningful wage increase.
The president also noted the critical role of dockworkers in the aftermath of Hurricane Helene and stated that now is not the time for ocean carriers to avoid negotiating fair wages. His administration will monitor any price gouging by foreign carriers, including those on the USMX board.
In response, USMX reiterated its previous offer of nearly a 50 % wage increase, urging the union to return to negotiations as the only way to reach a resolution. However, the ILA criticized the offer as insufficient, pointing out that many members earn only $20 an hour while operating multimillion-dollar equipment. They also highlighted the lengthy six-year wage progression required to reach the top wage tier, regardless of hours worked.
The union remains firmly opposed to any form of automation that would replace jobs, emphasizing that job preservation is non-negotiable.
In light of the strike, shipping lines such as ONE, CMA CGM, and APL have declared force majeure. CMA CGM informed customers that its contracts allow for alternative delivery options, suspension of deliveries, or abandonment of goods, with all costs passed on to the shipper.
Maersk stated there are no restrictions on new import bookings for ILA-controlled ports, except for refrigerated cargo. They mentioned the possibility of providing contingency inland routes from West Coast ports to East Coast markets and requested customers to retain their empty containers due to a lack of alternative depots.
