Box Lines Declare Force Majeure as U.S. Dockworker Strike Enters Second Day
As the dockworker strike continues on the U.S. East and Gulf coasts, shipping lines are beginning to declare force majeure. Hopes for government intervention to halt the economically damaging strike were dashed when the White House sided with the union.
The Biden administration also warned ocean carriers against engaging in price gouging while the strike persists. In a statement, President Biden encouraged both sides to return to collective bargaining, emphasizing that negotiations are the best path to securing fair pay and benefits for workers.
The President highlighted the record profits ocean carriers have earned since the pandemic, with some seeing profits increase by more than 800% compared to pre-pandemic levels. He called for these carriers to present a fair offer to the International Longshoremen’s Association (ILA) workers, noting that dockworkers played a critical role during the pandemic and in the aftermath of disasters like Hurricane Helene.
“My administration will be closely monitoring for any price gouging that benefits foreign ocean carriers,” President Biden added, particularly those represented by the U.S. Maritime Alliance (USMX).
USMX, which represents a group of foreign-owned carriers, reiterated a previous offer of a nearly 50% wage increase and urged the union to return to the negotiating table. However, the ILA called the offer insufficient, pointing out that many of their members operate multimillion-dollar container-handling equipment for just $20 an hour, only slightly above minimum wage in some states. They also expressed frustration over the long six-year wage progression required before reaching top-tier wages.
Automation is another contentious issue, with the ILA firmly opposing any form of automation that could replace jobs. The union remains committed to preserving jobs and traditional work functions, which it considers non-negotiable.
Several box lines, including ONE, CMA CGM, and APL, have declared force majeure. CMA CGM directed its customers to contract clauses allowing for alternative delivery locations, suspended deliveries, or abandoning the carriage of goods, with the shipper bearing any additional costs. Maersk said it is not restricting new import bookings to ILA-controlled ports, except for refrigerated cargo, and is offering contingency routes from West Coast ports to East Coast markets.
