And the Biden administration has so far done little to stop them.
P orts on the East Coast and Gulf Coast will come to a halt on October 1 if the International Longshoremen’s Association (ILA) follows through on its plans to go on strike. Negotiations for a new six-year labor contract have been on pause since June, when the ILA walked away from the table. The ILA represents roughly 47,000 dockworkers, nearly the entire longshore workforce for ports on the Atlantic and the Gulf of Mexico.
Joe Biden, who reports indicate is still president of the United States, has said he is running the most pro-union administration in U.S. history, and he is supposed to have excellent relationships with organized labor. Yet he appears powerless to stop this strike, and the White House has not intervened to help the two sides reach a deal.
What does the ILA want? A 77 percent pay raise, some reports have indicated, though neither side has confirmed details of negotiations. It wants higher than the 32 percent pay raise that the International Longshore and Warehouse Union (ILWU) got last year, though it reportedly turned down an offer of 40 percent.
A strike on the East Coast would be the first since 1977. Many shippers have considered the East Coast to be more reliable than the West Coast, where the ILWU takes a more confrontational approach to negotiations. The ILA is a completely different union, and it has in recent decades been more accommodating of investment in better port technology. In 2022, when the West Coast ports were clogged with record levels of imports and a possible strike loomed, shippers routed more freight through the East Coast instead.
The Port of Virginia, for example, is America’s most efficient port, in large part because it has invested in automation technology. The world’s most productive ports — located in places such as Rotterdam and Singapore — are almost entirely automated, with cranes and trucks moving containers without human operators. Virginia is behind that global standard, but it is still the best the U.S. has to offer.
Unfortunately, the ILA this time around has made automation a sticking point in negotiations. The union walked away from the negotiating table in mid June after alleging that carrier Maersk is violating the current labor contract by processing trucks with an automated IT system. Maersk said the system does not violate the labor contract. Negotiations have not occurred since.
ILA president Harold Daggett has been gearing up for a strike since at least November 2023. In March 2023, employers made the ILA an offer that matched what the ILWU got the year before: a 32 percent wage increase over the life of the contract. The ILA turned it down.
Shippers have been fully aware of the ILA’s intentions, with many routing shipments back through West Coast ports now that the ILWU’s labor contract is solidified. Price signals have responded accordingly: The spot rate to ship a container from Asia to the East Coast has declined by about 40 percent over the past three weeks, according to the Journal of Commerce. Shippers who rely on the East Coast ports moved their holiday-season deliveries up, with some arriving as early as June, to avoid any disruptions later in the year.
Shippers have been begging the Biden administration to intervene and prevent a strike. But Daggett is against White House intervention because he believes the ILWU got a worse deal than it otherwise would have last year as a result of the Biden administration inserting itself into the talks. And Biden so far has acquiesced to Daggett’s wishes and not gotten involved.
One of the reasons the Senate did not consent to the appointment of Julie Su as secretary of labor is that she does not have experience with mediating these high-profile negotiations between unions and employers. When he was still a Democrat, Senator Joe Manchin (I., W.Va.) said he was concerned Su would not be able to “collaboratively lead both labor and industry to forge compromises acceptable to both parties” in announcing his opposition to her nomination. But Biden ignored the Senate’s will and has kept Su as acting secretary indefinitely.
The ILA is famous for corruption and nepotism. In the bad old days, the ILWU was controlled by communists, and the ILA was controlled by the Mafia. ILA Local 1588 was especially notorious. As the Washington Post reported in 2004, “In 1954, when Marlon Brando starred in the Oscar-winning ‘On the Waterfront,’ one of 1588’s delegates was already under investigation for taking kickbacks from its members.”
“Local 1588 was historically so corrupt that mob enforcers were unnecessary, according to one veteran investigator,” the story said. “Kickbacks, extortion and fraud became as routine as a Labor Day picnic at the local, long a lucrative outpost for the Genovese crime family.”
The legacy of organized crime continues, not with dead bodies (since 2005, at least), but with uncompetitive, highly restricted labor markets, and continued financial shenanigans. The workforce largely consists of white men with family connections to current or previous ILA members. Genovese family members admitted to racketeering on the New Jersey waterfront in 2014. A foreman in New Jersey was convicted of fraud in 2017 for making nearly $500,000 per year while working as little as eight hours a week. After his conviction, his wife was given a job with one of the union’s benefit funds.
In 2005, investigators uncovered a scheme in Boston where dockworkers were enrolling their children, as young as two years old, in the union so that by the time they reached working age, they would already have seniority. Shipping officials discovered this scheme when a newly registered union member had the same name as a longshoreman’s ten-year-old granddaughter. “Payroll checks were issued in the children’s names, but . . . it was unclear who had cashed them or how much money was involved,” the Associated Press reported at the time.
Harold Daggett is a “third-generation ILA member,” according to the union’s website. One of his sons, Dennis, is the union’s executive vice president, and another one, John, is general vice president of the Atlantic coast district. In 2023, Harold made $855,261 and Dennis made $467,664 from the union.
This nepotistic enterprise is about to hold all East Coast importers and exporters hostage by going on strike after breaking off negotiations months ago, and the Biden administration is standing idly by. “We’ve never invoked Taft-Hartley to break a strike and are not considering doing so now,” an unnamed administration official said last week, referencing the 1947 law that George W. Bush used to reopen West Coast ports in 2002.
The official also said, “We encourage all parties to remain at the bargaining table and negotiate in good faith.” But parties have not been at the bargaining table since June, and no talks are set to take place between now and the contract’s expiration on September 30. The federal government employs mediators for situations exactly like this one. The ILA and the employer’s association filed for mediation in mid August. No mediation has occurred.
Short of invoking Taft-Hartley, which would likely be legally justifiable, and short, even, of binding arbitration, the administration could work out an agreement for a cooling-off period during which the current contract remains in effect and workers remain on the docks while the sides enter federal mediation. That’s the sort of thing it should be able to pull off if it really has working relationships with unions and really cares about the national interest. Instead, a month before a presidential election, it seems set to let 47,000 dockworkers inflict economic harm on millions of Americans, in a strike the union bosses have been looking forward to for over a year.