The ILA Could Strike Again in January: What You Need to Know

In October, tens of thousands of Internationale Longshoremen’s Association (ILA) members ended their three-day strike on the East and Gulf Coast ports. The decision to end the strike was a welcome development for the workers, small business owners, and communities across America that rely on the ports for vital goods. 

The ILA and U.S. Maritime Alliance (USMX) agreed to extend the existing contract through mid-January while continuing to negotiate a long-term contract. That means the ILA could go on strike again in January if an agreement can’t be reached. 

Here’s what that could mean for you. 

The Impact of a Second Strike

The East and Gulf Coast ports service more than half of imports to the U.S., and a second strike could have devastating impacts. 

Fast Facts 

• Consumers could see shortages and price increases on items like groceries, clothing, and electronics, affecting workers and families across America. 
• Major supply chains could be crippled, devastating the economy. Economists believe a similar disruption in 2002 cost the economy $1 billion per day, and it took six months for the economy to recover.   

• Remember: In September, JPMorgan Chase calculated an ILA strike would cost the economy between $3.8 billion to $4.5 billion per day. 

• Small businesses would face the brunt of the economic fallout as they are already operating within smaller margins, a tighter labor market, and higher costs from inflation.  

• Zoom out: A strike organized by the International Association of Machinists and Aerospace Workers (IAM) at Boeing forced suppliers to implement temporary furloughs, showcasing the devastating impacts of similar strikes deep in the supply chain. 

• Because efficient ports are essential for maintaining America's competitiveness in a rapidly evolving global market, strikes and outdated technological solutions pose serious risks to the country's economic leadership. 

• Yes, and: Modern ports are not just economic engines, they are critical nodes in defense and emergency preparedness.  

The ILA, which ended a three-day walkout in October after agreeing in principle to a nearly 63% pay increase over six years, has walked away from negotiations with the USMX, highlighting a critical issue: Union bosses are employing extreme tactics without considering the broader economic impact – even on their own membership. 

What are the Issues?

Pay

Pay was agreed to in the fall but is contingent on a full contract being ratified by Jan. 15, 2025.  

All ports are open 24 hours, but any ILA member working outside a “standard” daytime shift is paid overtime – 70% of all hours worked. Workers make on average at key ILA ports:

• NY/NJ: $350,000 

• Norfolk: $200,000 

• Savannah: $180,00 

• Houston: $170,000 

At the current offer, wages for full-time workers in NY/NJ would be $500,000. In addition, dock workers receive full coverage healthcare, with no member premium. Last fall, the ILA demanded a 77% pay increase over six years and reportedly rejected a 40% increase before walking out when its existing contract expired Sept. 30.  

Modernization 

Infrastructure modernization has become the line in the sand.  

America's ports suffer from outdated infrastructure, ranking as some of the least productive in the world. According to The World Bank Group and IHS Markit, no U.S. port ranked in the top 50 for productivity in the world. Modernizing them is critical for enhancing capacity and reducing supply chain bottlenecks – both of which will help to meet rising consumer demand. Other countries are over 40% more productive when it comes to vessel moves an hour, and much of that is due to technology. 

But the ILA halted negotiations over talks about modernizing ports, citing fears of job loss, even though the just-expired contract included provisions for semi-automation and specifies that neither jobs nor hours will be lost to updates. 

• “Unfortunately, the ILA is insisting on an agreement that would move our industry backward by restricting future use of technology that has existed in some of our ports for nearly two decades – making it impossible to evolve to meet the nation’s future supply chain demands,” USMX said. 
• “What we need is continued modernization that is essential to improve worker safety, increase efficiency in a way that protects and grows jobs, keeps supply chains strong, and increases capacity that will financially benefit American businesses and workers alike.” 

What's at Stake?

Walking away from the negotiating table is a reckless gamble with America's economic future.  

Union leaders are deploying extreme tactics, and ILA President Harold Daggett, who makes more than $900,000 a year, has boasted that he would “cripple” the economy with a protracted strike to achieve the union’s goals – regardless of the impact on small businesses, retail workers or construction workers, any of which might lose wages or jobs because of the downstream effects of a strike. 

That ripple effect, fueled not only by a breakdown in the supply chain but also by the lack of workers patronizing businesses that support the docks, would be felt by every American business and family. 

These ports collectively handle more than 68% of all containerized exports and 56% of imports for the nation, with a daily trade value exceeding $2.1 billion. The National Retail Federation recently noted that economists believe a similar disruption in 2002 cost the economy $1 billion per day and it took six months for the economy to recover.  

A high-level analysis of economic impacts by MITRE Corporation found that an ILA strike lasting 30 days would have an economic impact of:  

• $640 million per day at the New York/New Jersey ports.   

• $600 million per day at Virginia ports.  

• $51 million per day in exports at Houston ports.  

• $41.5 million per day in imports at Houston ports. 

What We're Saying

“The apparent disregard for the broader impact of strikes on the economy suggests a troubling disconnect between union leadership and the interest of most American workers.” 

– Neil Bradley, Chief Policy Officer, U.S. Chamber, RealClearPolicy op-ed.

About the authors

John Drake

John Drake is responsible for representing the business community on transportation, infrastructure, and supply chain issues before Congress, the administration, the media, the business community, and other stakeholders.

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