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This week, at every major port along the East and Gulf coasts of the United States work ground to a halt.
We run these dots? Who runs the gots?
The forty seven thousand DOC workers in the International Longshoreman's Association went on strike Monday night, demanding a pay raise of seventy seven percent over the next six years, as well as strict limitations on automation at the ports. The ports the strike shutdown handle nearly half of the containers that come in and out of the US every day.
From Houston, New Orleans, Mobile, Alabama, a bunch of ones in Florida, you know, Georgia, South Carolina, North Carolina, Virginia, and all the way up to New York.
Laura Curtis covers ports for Bloomberg, and she's had a whirlwind of a week because on Thursday Day night, after days of seemingly deadlock negotiations, the dock workers struck a tentative deal with the US Maritime Alliance, which represents the shipping companies, And just like that, the strike was over. Today, the ports are once again open for business, and a potential crisis was averted. One that could have caused chaos for companies, consumers, and the entire US economy. It could
even have affected the outcome of the presidential election. Crisis averted for now anyway.
It was really kind of a will promise to pay you this much in the next round while we continue to work out the tougher issues so that we can get back to work.
Under the terms of the tentative deal, the dock worker's current contract has been extended until January fifteenth. The shipping companies agreed to a substantial race sixty two percent over the term of the dock worker's next six year contract. But this agreement is tentative, meaning that until January fifteenth, the dock workers will keep the ports open while they
continue to negotiate other terms of their contract. Now, the question is will the longshoremen and the shipping companies be able to come to a solid deal before their contract expires in the new year. Today, on the show, what drove tens of thousands of dock workers to go on strike, how the strike got paused, and why the fight against automation at ports could bring the longshoremen back to the picket lines next year. This is the big take from
Bloomberg News. I'm Sarah Holder. Last night, a massive strike that shut down every major port on the East Coast and Gulf Coast of the US suddenly ended. Laura Curtis, who's been covering the strike for Bloomberg, says that the resolution brought a lot of people a sense of relief.
So the dockworkers went on strike on Monday night into Tuesday morning in affected ports all up and down the Eastern Seaboard that typically process about fifty percent of US imports and exports. So everybody was really concerned about how long it would last and what the overall impact to the economy would be.
The International Longshoremen's Association, or the ISLA, was asking for a seventy seven percent raise over six years, and also strict limits on the use of automation at ports, including for things like gates, cranes, and trucks.
It's important to keep in mind too, you know, they the last time they negotiated wages was six years ago. A lot has changed since then. Inflation has taken a huge bite out of that paycheck. In addition to that, they worked really hard through the pandemic, and so their position has been we deserve a share of the profits that these shipping companies earned on their backs, basically, and
then it started. I started hearing more about more intractable things like automation and the use of technology, and the really deeply instilled fear that you know, robots were going to take over their jobs.
Those dock workers were facing off with an organization known as the US Maritime Alliance or USMX. It's a group of shipping lines and companies that operate port terminals. Most of the companies are based overseas. At first, USMX offered workers a forty percent raise, but the union rejected the offer and kept pushing for more for consumers and businesses. The strike, which threatened to drag on for weeks, brought to mind one thing the log jams usport's experience during
the pandemic. Logjams that saw ships full of containers sitting idle offshore for weeks, causing store shelves to sit empty, factories to grind to a halt, and prices to begin an upward climb that the US economy is still grappling with.
I mean, they had, you know, millions of dollars cargo that was stranded in these containers on the vessels and just weren't sure when it was going to come. Presented a lot of planning difficulties. And I think the other part of this that is interesting, Even though it didn't go on too long, you started to see some kind of psychological impacts in the public. People were starting to panic by things like toilet paper and paper towels, and we were starting to see things that reminded us a
little bit of the pandemic. And you know, I had one colleague who was like, this is too soon, you know, it's this is PTSD. I don't know, this is too much. She heard from a friend that there was no paper towels that her supermarket left, and just that kind of thing.
Shivers run through you thinking about that time.
Yeah, absolutely, like we're not ready, you know. So it was not just about the impact that it had, but I think the fear around it.
The timing was delicate. With a critical presidential election just four weeks away, Having the ports closed and shortages looming would look bad for Biden and for Harris, but so would using presidential powers to stop a strike. So the White House had been putting pressure on both sides to come to a deal, and then last night, as suddenly as the strike had started, it ended.
So Thursday night we started hearing rumors that they may be close to some kind of agreement, not on the formal long term contract, but just something that would get us through and reopen the ports, get cargo flowing again.
Where were you when you heard the news?
Where was I? I was in my bedroom. I was working really hard remotely and trying to figure out kind of where the news was going to come from. I was working with my colleagues in the White House. I was working with my colleagues in New York. I was working with photographers that we had dispatched to the picket lines and some reporters. We sent two places like Wilmington, North Carolina, where there was a port there that was affected, and talking to local longshorman.
It was not the seventy seven percent raise the dock workers had initially demanded, but it was a major raise sixty two percent over the life of the new six year contract.
And that will kick in in when the next contract starts. Right now, they've agreed to continue working under the previous contract until January fifteenth.
For now, the ports are back up and running. The election will be decided before the dock workers' contract expires again, but one of the key issues that drove doc workers to strike, automation, likely won't be resolved by next year.
The isle's president, Harold Daggett, has said several times that he won't accept any deal that allows automation.
Will get to how the tentative deal was reached and what sticking points remain after the break. When the dock workers went on strike earlier this year, the nation braced for the supply chain snarls and shortages we all experienced during the pandemic. The strike was costing the US economy and estimated three to five billion dollars a day, and there were worries those costs could mount if the strike
dragged on. Editor Laura Curtis prepared for weeks of breaking news updates as the story unfolded, and she took calls from sources across the country late into the night.
It was getting a little bit stressful, you know, even from my bedroom.
But it didn't take weeks, it took days. I asked Laura how the dock workers and the shipping companies reached a tentative resolution so quickly.
Well, There are a couple of things I think that may have helped in a weird way. The biggest one being the hurricane that hit huge parts of the areas that are affected by the strike right. Hurricane Helene wiped out parts of North Carolina, really hit Florida hard. We had Governor DeSantis declaring that he was going to send the National Guarden to reactivate the port somehow or at
least to help out wherever they could. And so I think Biden's aids were successful in bringing that to the attention of both sides and saying, listen, this is not helping with her Kane recovery, This is not fair, this is unsafe, and I think that message got through. Neither side wanted to be seen as imperiling an already imperiled situation.
Laura says. Her sources also revealed that both sides of the port negotiations were under extreme pressure to make a deal as quickly as possible. The White House was pushing for a resolution behind the scenes.
We now know from sources the USMX board was convened yesterday morning, and Biden's top economic advisor, Layel Brainerd, was the one who's sort of dispatched to put the screws on them and to work with them and to educate them about what's at stake. Here. On the other side, we had Acting Secretary Julie Sue who traveled to New Jersey yesterday and met with union leaders to try to
convey the same message. We knew that Biden really really didn't want to break the strike, and that was something that they kept communicating to both sides.
He could have broken the strike using a power called taft heartly to force the union back to work for a period of eighty days, but you're saying he did not want to do that.
He did not want to do that. It would be a terrible look politically for him to break a strike you just weeks away from an election where getting the union vote and the working class vote is so important. We also heard from the ISLA President Daggett that if Biden did invoke that power, he would have directed his longshoreman to slow the role at the ports. I think he said he would reduce efficiency. So it was never a good option for Biden to even threaten that.
Talk about Harold Daggett for a second. He's something of a colorful guy, he's the head of the International Longshoreman's Association, and he's been throwing around a lot of strong language, not only threatening to slow down shipping if Biden broke the strike, but also saying he was going to crush the opposition. Were you surprised that he came to the table for this compromise to reach this steal.
I don't know. You know, I think he is a very shrewd negotiator. I think we saw that. I think he's the head of a very powerful union. I think sixty two percent wage increases pretty good. You know, doc workers on the West Coast last year got thirty two percent, and we were all thinking it would be much closer to that. So I'm not surprised in that way that
he agreed to go back to work under those terms. However, the other thing about Harold Daggett is he was committed to making the public understand his power.
Well, it seems like ultimately hitting pause on the strike is a good thing for many parties here for now, the workers, the economy, global commerce potentially. But is there a concern that the union might lose some of their leverage if they wait till January?
Absolutely they've lost some leverage just by virtue of the election being in the past. But you know, at the end of the day, they we've seen they can shut down the ports. You know, they can halt about fifty percent of US imports and exports in a day.
So they've really shown the power of their movement with even this less than a week long strike.
Right, I think in a way they've proven their leverage.
What does this resolution or this temporary resolution mean for the economy writ large.
Oh, it means we can keep going. Economists we're saying, as the strike went on, we have enough reserves, retailers have enough stockpiled goods so that we wouldn't really feel an impact until week two of the strike. But by then, you know, people were starting would start to get worried.
That seems to be good news for the current president, But what does this mean for the November election.
It's really good news, not just for Biden, but for Kamala Harris and Donald Trump. Neither of them wanted to talk about this, neither of them wanted to face it, neither of them really wanted to get in the middle of it. You know, it wasn't they both want They both need to be seen as supporting the union. But the longer this went on, I think it would be really hard to make the case that this was good for every working man, or every middle class person, or
every small business. This strike, because it shut so many crucial ports, had the potential to really impact the lives of a lot of voters, and not just the union.
Even so, Laura says, the stickiest part of the deal could lie ahead. What did you about automation at ports?
Now? There are some carve outs already in the existing deal that allow for things like semi automation, which is a crane that can be that striverlest but can be controlled remotely by a person. That kind of thing. I think the Mercury issuer is things around artificial intelligence and how those types of automation might come in and impact the jobs that the stock workers have. So that's going to be the hardest thing for them to work out from this point, So.
The longshore men have their wage increase, but automation is still a huge open question. What's going to happen in January?
Well, the shipping companies and the union are going to have to figure out a way to either agree on what the language around automation in the existing contract means or they're going to have to find a new way to phrase it that everybody's happy with. You know, Harold Daggett has been saying that he wants to tighten the language on automation. Harold Daggett has said a lot of
different things about what he wants. I know that he wants to take this fight globally, though, and he said that his next stop after this is resolved is to convene an organization of international dock workers to take on the fight against automation, not just in the United States, but all over the world. With the automation and artificial intelligence piece of this is not unique to the union or to this union. It's not unique to dock workers.
We saw it out here in Hollywood with artificial intelligence. We're seeing it all in several of these knockdown, drag out contract fights. So, you know, you asked if this could happen again in six years, I think absolutely.
This is the big take from Bloomberg News. I'm Sarah Holder. This episode was produced by Thomas lou It was edited by Stacy Vennicksmith and Kate Davidson. It was fact checked by Adrian A.
Tapia.
It was mixed by Blake Maples. Our senior producer is Naomi Shavin. Our senior editor is Elizabeth Ponso. Our executive producer is Nicole Beamster. Bor Sage Bauman is Bloomberg's head of podcasts. If you liked this episode, make sure to subscribe and review The Big Take wherever you listen to podcasts. It helps people find the show. Thanks so much for listening. We'll be back next week.