Speaker 1: Bloomberg Audio Studios, podcasts, radio news.
Speaker 2: This week, at every major port along the East and
Speaker 2: Gulf coasts of the United States work ground to a halt.
Speaker 1: We run these dots? Who runs the gots?
Speaker 2: The forty seven thousand DOC workers in the International Longshoreman's
Speaker 2: Association went on strike Monday night, demanding a pay raise
Speaker 2: of seventy seven percent over the next six years, as
Speaker 2: well as strict limitations on automation at the ports. The
Speaker 2: ports the strike shutdown handle nearly half of the containers
Speaker 2: that come in and out of the US every day.
Speaker 1: From Houston, New Orleans, Mobile, Alabama, a bunch of ones
Speaker 1: in Florida, you know, Georgia, South Carolina, North Carolina, Virginia,
Speaker 1: and all the way up to New York.
Speaker 2: Laura Curtis covers ports for Bloomberg, and she's had a
Speaker 2: whirlwind of a week because on Thursday Day night, after
Speaker 2: days of seemingly deadlock negotiations, the dock workers struck a
Speaker 2: tentative deal with the US Maritime Alliance, which represents the
Speaker 2: shipping companies, And just like that, the strike was over. Today,
Speaker 2: the ports are once again open for business, and a
Speaker 2: potential crisis was averted. One that could have caused chaos
Speaker 2: for companies, consumers, and the entire US economy. It could
Speaker 2: even have affected the outcome of the presidential election. Crisis
Speaker 2: averted for now anyway.
Speaker 1: It was really kind of a will promise to pay
Speaker 1: you this much in the next round while we continue
Speaker 1: to work out the tougher issues so that we can
Speaker 1: get back to work.
Speaker 2: Under the terms of the tentative deal, the dock worker's
Speaker 2: current contract has been extended until January fifteenth. The shipping
Speaker 2: companies agreed to a substantial race sixty two percent over
Speaker 2: the term of the dock worker's next six year contract.
Speaker 2: But this agreement is tentative, meaning that until January fifteenth,
Speaker 2: the dock workers will keep the ports open while they
Speaker 2: continue to negotiate other terms of their contract. Now, the
Speaker 2: question is will the longshoremen and the shipping companies be
Speaker 2: able to come to a solid deal before their contract
Speaker 2: expires in the new year. Today, on the show, what
Speaker 2: drove tens of thousands of dock workers to go on strike,
Speaker 2: how the strike got paused, and why the fight against
Speaker 2: automation at ports could bring the longshoremen back to the
Speaker 2: picket lines next year. This is the big take from
Speaker 2: Bloomberg News. I'm Sarah Holder. Last night, a massive strike
Speaker 2: that shut down every major port on the East Coast
Speaker 2: and Gulf Coast of the US suddenly ended. Laura Curtis,
Speaker 2: who's been covering the strike for Bloomberg, says that the
Speaker 2: resolution brought a lot of people a sense of relief.
Speaker 1: So the dockworkers went on strike on Monday night into
Speaker 1: Tuesday morning in affected ports all up and down the
Speaker 1: Eastern Seaboard that typically process about fifty percent of US
Speaker 1: imports and exports. So everybody was really concerned about how
Speaker 1: long it would last and what the overall impact to
Speaker 1: the economy would be.
Speaker 2: The International Longshoremen's Association, or the ISLA, was asking for
Speaker 2: a seventy seven percent raise over six years, and also
Speaker 2: strict limits on the use of automation at ports, including
Speaker 2: for things like gates, cranes, and trucks.
Speaker 1: It's important to keep in mind too, you know, they
Speaker 1: the last time they negotiated wages was six years ago.
Speaker 1: A lot has changed since then. Inflation has taken a
Speaker 1: huge bite out of that paycheck. In addition to that,
Speaker 1: they worked really hard through the pandemic, and so their
Speaker 1: position has been we deserve a share of the profits
Speaker 1: that these shipping companies earned on their backs, basically, and
Speaker 1: then it started. I started hearing more about more intractable
Speaker 1: things like automation and the use of technology, and the
Speaker 1: really deeply instilled fear that you know, robots were going
Speaker 1: to take over their jobs.
Speaker 2: Those dock workers were facing off with an organization known
Speaker 2: as the US Maritime Alliance or USMX. It's a group
Speaker 2: of shipping lines and companies that operate port terminals. Most
Speaker 2: of the companies are based overseas. At first, USMX offered
Speaker 2: workers a forty percent raise, but the union rejected the
Speaker 2: offer and kept pushing for more for consumers and businesses.
Speaker 2: The strike, which threatened to drag on for weeks, brought
Speaker 2: to mind one thing the log jams usport's experience during
Speaker 2: the pandemic. Logjams that saw ships full of containers sitting
Speaker 2: idle offshore for weeks, causing store shelves to sit empty,
Speaker 2: factories to grind to a halt, and prices to begin
Speaker 2: an upward climb that the US economy is still grappling with.
Speaker 1: I mean, they had, you know, millions of dollars cargo
Speaker 1: that was stranded in these containers on the vessels and
Speaker 1: just weren't sure when it was going to come. Presented
Speaker 1: a lot of planning difficulties. And I think the other
Speaker 1: part of this that is interesting, Even though it didn't
Speaker 1: go on too long, you started to see some kind
Speaker 1: of psychological impacts in the public. People were starting to
Speaker 1: panic by things like toilet paper and paper towels, and
Speaker 1: we were starting to see things that reminded us a
Speaker 1: little bit of the pandemic. And you know, I had
Speaker 1: one colleague who was like, this is too soon, you know,
Speaker 1: it's this is PTSD. I don't know, this is too much.
Speaker 1: She heard from a friend that there was no paper
Speaker 1: towels that her supermarket left, and just that kind of thing.
Speaker 2: Shivers run through you thinking about that time.
Speaker 1: Yeah, absolutely, like we're not ready, you know. So it
Speaker 1: was not just about the impact that it had, but
Speaker 1: I think the fear around it.
Speaker 2: The timing was delicate. With a critical presidential election just
Speaker 2: four weeks away, Having the ports closed and shortages looming
Speaker 2: would look bad for Biden and for Harris, but so
Speaker 2: would using presidential powers to stop a strike. So the
Speaker 2: White House had been putting pressure on both sides to
Speaker 2: come to a deal, and then last night, as suddenly
Speaker 2: as the strike had started, it ended.
Speaker 1: So Thursday night we started hearing rumors that they may
Speaker 1: be close to some kind of agreement, not on the
Speaker 1: formal long term contract, but just something that would get
Speaker 1: us through and reopen the ports, get cargo flowing again.
Speaker 2: Where were you when you heard the news?
Speaker 1: Where was I? I was in my bedroom. I was
Speaker 1: working really hard remotely and trying to figure out kind
Speaker 1: of where the news was going to come from. I
Speaker 1: was working with my colleagues in the White House. I
Speaker 1: was working with my colleagues in New York. I was
Speaker 1: working with photographers that we had dispatched to the picket
Speaker 1: lines and some reporters. We sent two places like Wilmington,
Speaker 1: North Carolina, where there was a port there that was affected,
Speaker 1: and talking to local longshorman.
Speaker 2: It was not the seventy seven percent raise the dock
Speaker 2: workers had initially demanded, but it was a major raise
Speaker 2: sixty two percent over the life of the new six
Speaker 2: year contract.
Speaker 1: And that will kick in in when the next contract starts.
Speaker 1: Right now, they've agreed to continue working under the previous
Speaker 1: contract until January fifteenth.
Speaker 2: For now, the ports are back up and running. The
Speaker 2: election will be decided before the dock workers' contract expires again,
Speaker 2: but one of the key issues that drove doc workers
Speaker 2: to strike, automation, likely won't be resolved by next year.
Speaker 1: The isle's president, Harold Daggett, has said several times that
Speaker 1: he won't accept any deal that allows automation.
Speaker 2: Will get to how the tentative deal was reached and
Speaker 2: what sticking points remain after the break. When the dock
Speaker 2: workers went on strike earlier this year, the nation braced
Speaker 2: for the supply chain snarls and shortages we all experienced
Speaker 2: during the pandemic. The strike was costing the US economy
Speaker 2: and estimated three to five billion dollars a day, and
Speaker 2: there were worries those costs could mount if the strike
Speaker 2: dragged on. Editor Laura Curtis prepared for weeks of breaking
Speaker 2: news updates as the story unfolded, and she took calls
Speaker 2: from sources across the country late into the night.
Speaker 1: It was getting a little bit stressful, you know, even
Speaker 1: from my bedroom.
Speaker 2: But it didn't take weeks, it took days. I asked
Speaker 2: Laura how the dock workers and the shipping companies reached
Speaker 2: a tentative resolution so quickly.
Speaker 1: Well, There are a couple of things I think that
Speaker 1: may have helped in a weird way. The biggest one
Speaker 1: being the hurricane that hit huge parts of the areas
Speaker 1: that are affected by the strike right. Hurricane Helene wiped
Speaker 1: out parts of North Carolina, really hit Florida hard. We
Speaker 1: had Governor DeSantis declaring that he was going to send
Speaker 1: the National Guarden to reactivate the port somehow or at
Speaker 1: least to help out wherever they could. And so I
Speaker 1: think Biden's aids were successful in bringing that to the
Speaker 1: attention of both sides and saying, listen, this is not
Speaker 1: helping with her Kane recovery, This is not fair, this
Speaker 1: is unsafe, and I think that message got through. Neither
Speaker 1: side wanted to be seen as imperiling an already imperiled situation.
Speaker 2: Laura says. Her sources also revealed that both sides of
Speaker 2: the port negotiations were under extreme pressure to make a
Speaker 2: deal as quickly as possible. The White House was pushing
Speaker 2: for a resolution behind the scenes.
Speaker 1: We now know from sources the USMX board was convened
Speaker 1: yesterday morning, and Biden's top economic advisor, Layel Brainerd, was
Speaker 1: the one who's sort of dispatched to put the screws
Speaker 1: on them and to work with them and to educate
Speaker 1: them about what's at stake. Here. On the other side,
Speaker 1: we had Acting Secretary Julie Sue who traveled to New
Speaker 1: Jersey yesterday and met with union leaders to try to
Speaker 1: convey the same message. We knew that Biden really really
Speaker 1: didn't want to break the strike, and that was something
Speaker 1: that they kept communicating to both sides.
Speaker 2: He could have broken the strike using a power called
Speaker 2: taft heartly to force the union back to work for
Speaker 2: a period of eighty days, but you're saying he did
Speaker 2: not want to do that.
Speaker 1: He did not want to do that. It would be
Speaker 1: a terrible look politically for him to break a strike
Speaker 1: you just weeks away from an election where getting the
Speaker 1: union vote and the working class vote is so important.
Speaker 1: We also heard from the ISLA President Daggett that if
Speaker 1: Biden did invoke that power, he would have directed his
Speaker 1: longshoreman to slow the role at the ports. I think
Speaker 1: he said he would reduce efficiency. So it was never
Speaker 1: a good option for Biden to even threaten that.
Speaker 2: Talk about Harold Daggett for a second. He's something of
Speaker 2: a colorful guy, he's the head of the International Longshoreman's Association,
Speaker 2: and he's been throwing around a lot of strong language,
Speaker 2: not only threatening to slow down shipping if Biden broke
Speaker 2: the strike, but also saying he was going to crush
Speaker 2: the opposition. Were you surprised that he came to the
Speaker 2: table for this compromise to reach this steal.
Speaker 1: I don't know. You know, I think he is a
Speaker 1: very shrewd negotiator. I think we saw that. I think
Speaker 1: he's the head of a very powerful union. I think
Speaker 1: sixty two percent wage increases pretty good. You know, doc
Speaker 1: workers on the West Coast last year got thirty two percent,
Speaker 1: and we were all thinking it would be much closer
Speaker 1: to that. So I'm not surprised in that way that
Speaker 1: he agreed to go back to work under those terms. However,
Speaker 1: the other thing about Harold Daggett is he was committed
Speaker 1: to making the public understand his power.
Speaker 2: Well, it seems like ultimately hitting pause on the strike
Speaker 2: is a good thing for many parties here for now,
Speaker 2: the workers, the economy, global commerce potentially. But is there
Speaker 2: a concern that the union might lose some of their
Speaker 2: leverage if they wait till January?
Speaker 1: Absolutely they've lost some leverage just by virtue of the
Speaker 1: election being in the past. But you know, at the
Speaker 1: end of the day, they we've seen they can shut
Speaker 1: down the ports. You know, they can halt about fifty
Speaker 1: percent of US imports and exports in a day.
Speaker 2: So they've really shown the power of their movement with
Speaker 2: even this less than a week long strike.
Speaker 1: Right, I think in a way they've proven their leverage.
Speaker 2: What does this resolution or this temporary resolution mean for
Speaker 2: the economy writ large.
Speaker 1: Oh, it means we can keep going. Economists we're saying,
Speaker 1: as the strike went on, we have enough reserves, retailers
Speaker 1: have enough stockpiled goods so that we wouldn't really feel
Speaker 1: an impact until week two of the strike. But by then,
Speaker 1: you know, people were starting would start to get worried.
Speaker 2: That seems to be good news for the current president,
Speaker 2: But what does this mean for the November election.
Speaker 1: It's really good news, not just for Biden, but for
Speaker 1: Kamala Harris and Donald Trump. Neither of them wanted to
Speaker 1: talk about this, neither of them wanted to face it,
Speaker 1: neither of them really wanted to get in the middle
Speaker 1: of it. You know, it wasn't they both want They
Speaker 1: both need to be seen as supporting the union. But
Speaker 1: the longer this went on, I think it would be
Speaker 1: really hard to make the case that this was good
Speaker 1: for every working man, or every middle class person, or
Speaker 1: every small business. This strike, because it shut so many
Speaker 1: crucial ports, had the potential to really impact the lives
Speaker 1: of a lot of voters, and not just the union.
Speaker 2: Even so, Laura says, the stickiest part of the deal
Speaker 2: could lie ahead. What did you about automation at ports?
Speaker 1: Now? There are some carve outs already in the existing
Speaker 1: deal that allow for things like semi automation, which is
Speaker 1: a crane that can be that striverlest but can be
Speaker 1: controlled remotely by a person. That kind of thing. I
Speaker 1: think the Mercury issuer is things around artificial intelligence and
Speaker 1: how those types of automation might come in and impact
Speaker 1: the jobs that the stock workers have. So that's going
Speaker 1: to be the hardest thing for them to work out
Speaker 1: from this point, So.
Speaker 2: The longshore men have their wage increase, but automation is
Speaker 2: still a huge open question. What's going to happen in January?
Speaker 1: Well, the shipping companies and the union are going to
Speaker 1: have to figure out a way to either agree on
Speaker 1: what the language around automation in the existing contract means
Speaker 1: or they're going to have to find a new way
Speaker 1: to phrase it that everybody's happy with. You know, Harold
Speaker 1: Daggett has been saying that he wants to tighten the
Speaker 1: language on automation. Harold Daggett has said a lot of
Speaker 1: different things about what he wants. I know that he
Speaker 1: wants to take this fight globally, though, and he said
Speaker 1: that his next stop after this is resolved is to
Speaker 1: convene an organization of international dock workers to take on
Speaker 1: the fight against automation, not just in the United States,
Speaker 1: but all over the world. With the automation and artificial
Speaker 1: intelligence piece of this is not unique to the union
Speaker 1: or to this union. It's not unique to dock workers.
Speaker 1: We saw it out here in Hollywood with artificial intelligence.
Speaker 1: We're seeing it all in several of these knockdown, drag
Speaker 1: out contract fights. So, you know, you asked if this
Speaker 1: could happen again in six years, I think absolutely.
Speaker 2: This is the big take from Bloomberg News. I'm Sarah Holder.
Speaker 2: This episode was produced by Thomas lou It was edited
Speaker 2: by Stacy Vennicksmith and Kate Davidson. It was fact checked
Speaker 2: by Adrian A.
Speaker 1: Tapia.
Speaker 2: It was mixed by Blake Maples. Our senior producer is
Speaker 2: Naomi Shavin. Our senior editor is Elizabeth Ponso. Our executive
Speaker 2: producer is Nicole Beamster. Bor Sage Bauman is Bloomberg's head
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Speaker 2: It helps people find the show. Thanks so much for listening.
Speaker 2: We'll be back next week.