Profit over Payment, one must take care of the ones that line the pockets.
When East and Gulf Coast longshoremen went on strike last week, their employers claimed to be unable to afford their wage demands. In truth, the shipping industry has seen unparalleled profits in recent years. The strike made them change their tune.
In a press release issued shortly before International Longshoremen’s Association (ILA) members walked out last Tuesday, the United States Maritime Alliance (USMX) expressed disbelief that the ILA had rejected its latest wage offer for a six-year contract. “Our current offer of a nearly 50 percent wage increase exceeds every other recent union settlement,” the press release said.
While the offer of a 50 percent wage increase did exceed most major recent union contract settlements, the other half of the statement was missing: USMX member companies’ profits over the past five years have vastly exceeded the profits of any other firms that have signed these union contracts.
The ILA knew there was more money in USMX corporate coffers than the company claimed to be able to furnish. So they kept pushing, and on Friday, they won their demand for a 62 percent top wage rate increase over the course of the newly settled six-year contract.
Despite the carriers’ protests, they can very easily afford the wage demand that the ILA ended up winning. Here is a chart showing the operating profits for four of the five highest-volume USMX carriers (excluding COSCO, the Chinese state-owned enterprise).
This profit surge invites comparisons to the United Parcel Service (UPS), which grew nearly 60 percent in just three years, going from $7.7 billion in 2019 to $13.1 billion in 2022. In response, workers demanded a greater share. In 2023, they won wage increases up to 47 percent for part-timers and an 18.1 percent increase for full-time drivers at the top rate over the life of a five-year contract.
But the major carriers’ increases far exceed even that of UPS. The largest carrier in the USMX, Maersk, recorded a 292 percent increase in profit between 2020 and 2021, moving from $8.2 billion to $24 billion. CMA CGM, a French carrier, clocked in at a 538 percent increase, and Japan’s Ocean Network Express (ONE) saw a 475 percent increase.
ILA members clearly deserve a share of these increased profits, but the USMX consistently framed the ILA’s wage demands as excessive. Digging into the numbers a bit more, it’s clear that USMX held out on the ILA with little justification, and that the ILA strike called their bluff.