Thousands of port workers may go on strike again as a temporary deal between the International Longshoremen's Association and United States Maritime Alliance reached in October is set to expire on Jan. 15.
The Details: The current agreement was reached after a three-day port strike in October affected ports on the Gulf and East Coasts. The dockworkers had sought a 77% pay increase over the next six years and workplace protections for automation of port practices.
The tentative deal that was reached increased pay by 62%, but did not address the union's concerns about automation.
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A message from the United States Marine Alliance dated Dec. 20 addressed the use of technology and automation in ports.
"Evolving port operations and increasing wages and jobs for the ILA are not mutually exclusive. Modern technology is proven to dramatically increase the amount of cargo that can be moved through a port annually. ILA members make more money when they move more cargo and ports need to hire more workers to manage that growth," the message stated.
Harold Daggett, president of the International Longshoreman's Association, hinted at a potential strike in a Christmas Day message to union members.
"Our resolve may be tested again in mid-January as we face another deadline for negotiating a new Master Contract by January 15, 2025. We want to avoid another strike, and hope that our employers represented by United States Maritime Alliance will respect our demands for a fair and decent contract," Daggett wrote.
Why It Matters: Container shipping company ZIM Integrated Shipping Services Ltd. (NYSE:ZIM) announced an ILA Strike Surcharge in mid-December for all cargo moving to or from US East Coast and US Gulf ports effective from Jan. 10 in the event of a strike.
Zim said the charge is intended to help mitigate "additional costs and expenses to ZIM caused by a strike, work stoppage, work slowdown or other labor-related disruptions to operations" and will not apply if a strike is averted.
Ground shipping and freight companies like FedEx Corp. (NYSE:FDX) and United Parcel Service, Inc. (NYSE:UPS) could benefit in the event of a port strike as businesses would shift toward ground and air transportation of goods.
Investors can also monitor the effects of a potential port strike through the SonicShares Global Shipping ETF (NYSE:BOAT) which tracks the Solactive Global Shipping Index consisting of global shipping companies engaged in maritime transportation of goods and raw materials.
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