News / Box lines declare force majeure as White House defends ILA

Photo: ILA

Shipping lines are beginning to declare force majeure, as the US east and Gulf coast port strike enters its second day.

Any hope from employer association USMX that the government might intervene to halt the economically damaging strike was dashed yesterday, when the White House landed firmly on the side of the union.

The administration also warned carriers against ‘price-gouging’ as the strike continues.

A statement from President Biden urged both sides to restart collective bargaining, saying “the best way for workers to get the pay and benefits they deserve”.

It added: “I have urged USMX, which represents a group of foreign-owned carriers, to come to the table and present a fair offer to the workers of the International Longshoremen’s Association that ensures they are paid appropriately in line with their invaluable contributions.

“Ocean carriers have made record profits since the pandemic and, in some cases, in excess of 800% compared with their profits prior to the pandemic. Executive compensation has grown in line with those profits and profits have been returned to shareholders at record rates.

“It’s only fair that workers, who put themselves at risk during the pandemic to keep ports open, see a meaningful increase in their wages as well.”

Noting the devastation caused by Hurricane Helene, the president pointed out that dockworkers played an essential role.

“Now is not the time for ocean carriers to refuse to negotiate a fair wage for these essential workers while raking in record profits. My administration will be monitoring for any price gouging activity that benefits foreign ocean carriers, including those on the USMX board.”

USMX, meanwhile, reiterated the offer it made just before the strike began, of a near-50% wage increase, and urged the union to return to the negotiating table – “the only way to reach a resolution”.

The ILA responded that the offer was inadequate.

“They might claim a significant increase, but they conveniently omit that many of our members are operating multi-million-dollar container-handling equipment for a mere $20 an hour. In some states, the minimum wage is already $15. Furthermore, our members endure a grueling six-year wage progression before they can even reach the top wage tier, regardless of how many hours they work or the effort they put in.”

Automation, or lack thereof, is also a hard line for the union. “The ILA is steadfastly against any form of automation – full or semi – that replaces jobs or historical work functions. We will not accept the loss of work and livelihood for our members due to automation. Our position is clear: the preservation of jobs and historical work functions is non-negotiable.”

Box lines including ONE, CMA CGM and APL have since called force majeure.

CMA CGM pointed customers to the small print in its contract, which in certain circumstances allows it to offer alternative places of delivery; suspend and store deliveries; or “abandon the carriage of the goods and place the goods at the merchant’s disposal at any place or port which the carrier may deem safe and convenient, whereupon the responsibility of the carrier in respect of such goods shall cease”.

All of which will be charged at full price, and with any additional costs paid for by the shipper.

Maersk said there were no restrictions on new import bookings to ILA-controlled ports – except for refrigerated cargo. It said it could provide contingency inland routings from west coast ports to east coast markets, and asked customers to hold on to their empty containers, as it has no alternative empty depots.