ILA at the crossroads: dockworkers vs automation in US ports

Dockworkers with the International Longshoremen’s Association (ILA) agreed on October 4 to pause their strike and resume operations at all affected ports, averting a potential crisis that could have spiked inflation and possibly caused goods shortages just before November’s US presidential election.

The ILA manages unloading operations for containerised shipping at almost all East and Gulf Coast ports, making it an enormously powerful union due to its critical chokepoint in global shipping.

ILA workers had walked out on October 1 after their previous six-year contract with the United States Marine Alliance (USMX) expired.

Contract negotiations had been stalled since June, however, after a dispute over automation at an Alabama port. The dockworkers union’s stance on automation is hardline – their demands include a total ban on automation to protect jobs.

The ILA’s demands are focused on two things: better pay and benefits, and restrictions on automation. As global trade has boomed, shipping companies that compose USMX have raked in billions, while dockworkers have seen their finances hurt by inflation. As of October 5, the union and the USMX agreed upon a 62% pay increase over six years, with employers tripling contributions to pension plans and better healthcare options.

However, the real sticking point remains automation. The ILA is demanding “a total ban on the automation of cranes, gates and container movements that are used in the loading of freight at 36 US ports.” This demand seems like Luddism – and is a textbook example of it.

This comes at a time when US ports are severely lagging behind their international competitors in terms of efficiency

According to the Bureau of Labor Statistics, total factor productivity (TFP) – the ratio between total inputs and total outputs, often used to measure operational efficiency – in “other transportation and support activities”, a large part of which is port cargo handling, shockingly decreased by 27.8% between 1987 and 2022. A lack of automation also means that US ports cannot function 24/7 like many of the world’s top performing ports do. Port automation has the capacity to replace practically all of its members’ jobs as well as supercharge productivity.

This comes at a time when US ports are severely lagging behind their international competitors in terms of efficiency.

According to the World Bank’s Container Port Performance Index, there are no US ports ranked in the top 50 worldwide

This is due to a combination of factors, with limited automation being among the key issues. The US has few transshipment ports (which are more productive) where containers are passed from ship to ship as opposed to gateway ports, mostly due to the fact that internal waterway shipping is throttled by the Jones Act, which mandates that all ships using domestic waterways be US-built. The Foreign Dredge Act, requiring that all ships used for dredging be US-built, owned, and chartered, also means that many American ports cannot handle the very largest container ships, further decreasing efficiency.

According to the World Bank’s Container Port Performance Index, there are no US ports ranked in the top 50 worldwide; Charleston is the top-ranking US port at 53rd. For comparison, China counts 12 ports among the top 50, including three of the top 10 and the world’s top port both by efficiency and total container throughput, Shanghai-Yangshan.

Port performance is critical to a country’s economic performance. As the World Bank Group points out, “Efficient, high quality port infrastructure can facilitate investment in production and distribution systems, engender expansion of manufacturing and logistics, create employment opportunities, and raise income levels.”

The union’s unusually hardline stance on automation comes on the heels of the ILWU, the ILA’s West Coast counterpart, striking a deal in 2023 which accepted automation to some extent – so long as the workers were involved in any discussions involving further automation and shared in the gains.

Nevertheless, it may seem odd that dockworkers are fighting so hard to retain their jobs. Even though many are well paid, the work is backbreaking labour. Union workers replaced with automation can usually be placated with promises of retraining programmes and financial assistance, as one job equals one job.

The crucial distinction is that ILA jobs are inheritable and multigenerational – this nature makes them closer to capital than labour, as these are inheritable jobs, paid above market salaries due to contractual agreements and federal labour protections. The ILA’s opposition to automation will be difficult to overcome, as these workers are fighting not just for their jobs, but effectively for their children’s inheritance.