Update: Longshoremen from Maine to Texas strike, roofing supply chain threatened

Just over a month before the United States elects its next president, 45,000 longshoremen on the country's East and Gulf coasts have launched the largest strike in more than a generation, crippling half of the country's shipping industry after contract negotiations collapsed.

The strike is blocking everything leaving and coming into the country at 36 ports from Maine to Texas. It is estimated that about half of all containerized goods arrive at ports on the East and Gulf Coasts.

Analysts warn that it will cost the economy billions of dollars a day, put jobs at risk, and disrupt the supply chain, including roofing and building materials. It took nearly 18 months for the supply chain to return to normal following disruptions caused by a once-in-a-lifetime global pandemic.

President Joe Biden and his administration have steadfastly refused to intervene and use federal powers to end the strike. On Tuesday, the president pressured longshoremen's employers to increase their contract offers in order to strike a deal.

The International Longshoremen's Association, which represents the 45,000 longshoremen, had negotiated a new six-year contract with the employers' group the United States Maritime Alliance (USMX) before Monday's midnight deadline.

The sides reportedly continue to negotiate, but as of Tuesday evening there were no active negotiations and the strike appeared to be entering its third day. Negotiations between the USMX and the International Longshoreman's Association over a framework agreement that expired Sept. 30 have stalled.

The ILA closed all ports from Maine to Texas at 12:01 a.m. ET Monday after rejecting USMX's final proposal. It added that the offer “falls far short of its members’ demands for the ratification of a new treaty.”

ILA chief Harold Daggett said employers had not offered adequate wage increases or agreed to calls for a halt to port automation projects that put jobs at risk. The ILA represents 85,000 longshoremen, and this is the first strike in American ports since 1977.

In a turn of events, USMX filed an unfair labor practice lawsuit with the National Labor Relations Board before the strike deadline, requesting “immediate injunctive relief – requiring the union to resume negotiations – so that we can negotiate a deal.”

In response, the ILA released a statement on its website saying that the action was done in bad faith and that it was a “publicity stunt” and a “weak advertising campaign.”

“The filing of this lawsuit by USMX four days before the expiration of the current framework agreement clearly shows how poor a negotiating partner they have been,” the ILA said. “If yes [weren’t] For the ILA to have serious and productive negotiations, most local agreements would not have been concluded last year.”

The impact on the roof

Regarding the roofing industry, Craig Brightup, CEO of The Brightup Group, a government relations consulting firm in Washington, D.C., said companies that install roofing systems that rely on critical components arriving at these ports will feel the impact first .

“[T]“There are certain elements here that are imported in terms of commercial roof installation and if they don't come across you can never quite complete the job, that's the scenario I can imagine,” he said.

Brightup believes the roofing industry may be able to withstand the impact of the strike better than other industries, but the impact of the overall economic slowdown will not spare roofing companies.

“Various commercial businesses that may want to build a new roofing system and have this in their plans in the not too distant future…if retailers, wholesalers and shopping centers are suddenly affected, they may have to readjust their plans to maintain, repair or have a new roof.” Putting a roof on their facility,” he said.

However, the entire industry could be affected, especially companies that import materials and goods from Europe.

“Any disruption to this matter will cause problems; if it's just a day or two, even that will cause some, but eventually they may be able to reverse it,” Brightup said. “If it takes longer, it could have a really, really big impact.”

The National Roofing Contractors Association, which is actively monitoring the situation, sent an update to its members earlier this week. The notice included an analysis by Bill Flemming, senior vice president of the Cummings Group, a New York consulting firm, that laid out the fallout from the walkout.

Flemming said the impact of the strike would be felt immediately in the construction industry. If the strike lasts longer than a week, the strike “could lead to weeks or months of delays as ships back up and distribution to warehouses and construction sites is hampered.”

The specter of a protracted labor dispute follows the devastation caused by Hurricane Helene, a Category 4 storm that made landfall in Florida's Big Bend neighborhood. The storm caused record-breaking flooding as far away as North Carolina and, combined with escalating hostilities in the Middle East, has become a sword of Damocles hanging over the U.S. economy.

Brightup did not sugarcoat the impact of the shutdown, emphasizing that the consequences would be felt across almost all industries.

“This is something that every major industry needs to keep an eye on, and the roofing industry is a large segment of the roofing industry,” Brightup said. “This could be big.”

A coalition letter led by the National Retail Federation and signed by 177 trade associations, including the NRCA, called on President Biden to work with the ILA and USMX to restart negotiations.

“At this critical juncture, it is imperative that parties return to the table without engaging in disruptive activities that could harm the economy and the millions of businesses, workers and consumers who rely on the smooth flow of goods, both imports and exports, our ports on the East and Gulf Coasts,” the letter said.

Political solutions

Less than 35 days before the presidential election, the possible strike is prompting the White House to approach the situation cautiously.

The USMX boss was reportedly invited to DC in late September to discuss negotiations with Transportation Secretary Pete Buttigieg, acting Labor Secretary Julie Su and White House economic adviser Lael Brainard.

“My guess is the White House [implored] … the ILA 'please don't strike,' because in the end it will be to the detriment … of the White House and, implicitly, Vice President Harris' campaign,” Brightup said.

If the strike continues unsuccessfully, the president's resolve not to intervene could be frustrated by the damage caused by the work stoppage. In that case, the Biden administration could use a law called the Taft-Hartley Act. The law allows the president to ask a court to order an 80-day cooling-off period if the nation's public health or safety is at risk.

In 2022, Biden and Congress intervened to prevent a rail strike. In 2023, Su helped negotiate a deal to avoid a strike with West Coast dockworkers.

stalemate conditions

The disagreement between the ILA and USMX boils down to two issues: wages and automation. USMX has said its offer includes “industry-leading wage increases.” At the same time, ILA has previously stated that USMX is offering “an unacceptable wage increase package,” suggesting that a $5 hourly increase for each year of a six-year contract represents only a 10% annual increase.

Regarding automation, Daggett said the union will fight to protect its workers from being replaced by automated processes. The technology is currently being used in West Coast ports and the ILA is calling for a ban on automation of cranes, gates and container moving equipment. USMX said it would “maintain the existing technology language that has provided a framework for modernizing and increasing efficiency while protecting jobs and hours.”

Brightup believes this is probably the biggest sticking point, pointing out that many US ports are outdated compared to those around the world.

“The union insists that they do not want automation to suddenly be used in the other ports,” he said.

According to the USMX, substantive contract negotiations first began in 2022. The companies released a joint statement on May 12 saying they expected to complete local negotiations and resume contract negotiations this week. However, it was reported that the groups had not met since June.

Acting Labor Minister Su explained that the employers' group had refused to submit an offer that reflected workers' sacrifices and contributions to their employers' profits.

“The parties must return to the negotiating table, and that must start with these giant shipping companies recognizing that if they can make record profits, their workers should share in this economic success,” she told Reuters.

As of this writing, the strike remains in effect and the US economy is approaching a precipice.

This article was last updated on October 1 at 10:30 p.m. to reflect updated events.