The longshoreman strike is a great example of why you need a functioning president at the top of the executive branch.
There has been a lot of gobbledygook from leftist circles over the past several months that Biden’s inability to carry out the functions of the presidency is not a crisis because for the most part government runs on its own. They say, sure he’s not up to another four years but let’s not go crazy and start thinking about invoking the 25th Amendment forcing him to resign; we’ve got smart people in government and can get by.
Well the two arguments against that are the natural entropy of government and the ability to deal with crises. In both cases, someone needs to have both the legitimacy and incentive to knock heads and take the risks needed in a leader; as the sign on Truman’s desk said, “The Buck Stops Here.”
We’ve been skating on thin ice for a while regarding possible labor unrest across various critical parts of our transportation network and the longshoreman strike couldn’t have come at a worse time for the Biden Administration. The International Longshoremen’s Association (ILA) has maximum leverage given its ability to shut down the ports in the eastern half of the country, at a time when the economy is especially vulnerable and during the final month of an election when the Democrats need union support in a tight election.
The last thing the Democrats need is the economy to go into a tailspin. The second-to-last thing they need is the labor unrest that would stem from invoking Taft-Hartley and breaking the strike.
Outside of the danger to the economy and people’s livelihoods, there is something almost entrancing about the cartoon villainy of ILA President Harold Daggett, who has threatened to cripple the economy if his demands aren’t met regarding pay and automation. You can argue that long-term he is being foolish because he’s converted a viable threat in-being into a dangerous threat in fact — the best threats you can have are the ones you never have to state let alone use.
It also doesn’t help that the productivity of US ports is among the lowest in the world. In the world of tight supply chains and container shipping, inefficiency in port operations has the same effect as a tariff on the cost of goods. To paraphrase William J. LePetomane, Daggett and the ILA need to protect their phony baloney jobs. I’m as nostalgic as the next guy, but not for that ’70s vibe of unions using extortion to protect their cushy way of life.
So basically our cartoon villain Daggett has thrown down the gauntlet and challenged the feds to come get him. The problem in the executive branch is that anyone can make a decision and get it implemented under Biden’s signature, but there has to be somebody willing to take the risks and the heat to see that decision through and that’s where the buck stops. Somebody needs to not just broker across the various interests in any administration but to make the decision stick. There’s only so much our 21st Century version of Edith Wilson, Jill Biden, can do.
Like Zelensky and the mullahs, Daggett knows that a Republican victory will undercut his leverage so he’s in a use-it-or-lose it situation. If Biden does nothing, the economy tanks. If Biden breaks the strike, he weakens a valuable base of support for the Democrats right before the election.
From the Middle East to the Atlantic-Gulf Coast ports, the consequences of the Biden puppetry are coming home to roost.
Side note. It’s a shame Jen Psaki is no longer in government so that when the inevitable shortages from the ILA strike occur she can poo-poo us about “the tragedy of the treadmill that’s delayed.”
15 thoughts on “On the Waterfront”
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Do not lose sight of the fact that Daggett is 78 and pulls in salaries just shy of a million dollars, all paid by the poor, oppressed longshoremen. He’s observed that they can be ordered back to work for a 90 day cooling off period but that their already horrible productivity may suffer. Without giving Biden any credit, I’m not sure how much any president can do when a union thinks they have spotted a pot-o-gold. Don’t forget that these ports are mostly run by, also, notoriously inefficient and/or corrupt government entities. A true conundrum.
Another aspect of an actual port strike is that it might make more people aware of just how desperately foolishly over-dependent the de-industrialized US has become on imports of many items — including essentials like medications. And that in turn might make more people realize where all the good-paying jobs have gone.
The idiocy of the ILA demands concerns automation. There was a strike in LA/Long Beach a few years ago based on a demand that GPS not be used to track containers. The ILA wanted to continue to have members crawl over them to identify and track. It was ridiculous as this demand is. At the time I had a sailboat in a 40 foot slip in the LA Harbor. The slip next to me contained the 40 foot sailboat of an ILA member. We did not discuss the strike.
(In a roundabout way, this reminds me of the Christmas Mail Strike that the Canadian Union of Postal Workers (CUPW) used to do in Canada all but annually. The union prez at the time was some Scotsman more lefty than Lenin.)
Anyway. Aren’t these loading/unloading jobs in LA and elsewhere — all American ports really — ripe for automation? What’s holding up the transition?
I’m not aiming to be heartless about the ILA members. But really the writing has been on the walls — and the containers — for years and years now. This ILA action will do lots to bring it on faster. Is that their aim? One big last score to cash out on?
DeSantis said he is looking into ways to keep Florida ports open despite the strike. Perhaps the strike will end up strengthening the economies of Florida and other red states whose leaders aren’t beholden to the unions.
“What’s holding up the transition?”
When was the last time that a major IT roll out was anything other than a total disaster? Especially a Government one. It’s not like it’s something that could happen overnight or without the cooperation of the people doing the work now and for the foreseeable future.
If the iron rice bowl attitude wasn’t enough impediment, the ports are all old, designed, if that’s the right word, when cargo was carried in and out of the ships on the backs of stevedores. When you look at most ports, they are situated in the absolute worst possible locations; surrounded by dense urban development and the most expensive real estate in the world. All of them are operating 24/7/365 at close to maximum capacity. Making major changes happens slowly and incrementally or not at all. Remember that it’s not just stuff coming in, there’s lots going out too.
It took the UAW how long to reconcile themselves that the world had changed since 1948? And they aren’t done yet.
Here’s a reasonably knowledgeable discussion from a few days before the strike and Sal looks like he’s doing daily updates:
https://www.youtube.com/watch?v=MGdAp5o9ChE
“When you look at most ports, they are situated in the absolute worst possible locations”
There is a reasonable case that the ports were there first — Mother Nature provided the basic geographical layout. That is what subsequently attracted the surrounding dense urban development. Similar reason that a lot of cities are sited on what was once the most productive farmland, and is now instead covered with non-food-producing urban development.
As to the ports, where we have gone wrong is that a lot of what was once productive waterfront property which could have been used for port expansions was instead turned over to malls and big box retailers — developments that had no need to be on the waterfront. Government planning again! Look at almost anything that has gone wrong in the US, and there are government regulations at the bottom of the mess.
All of them are operating 24/7/365 at close to maximum capacity.
I’d just like to express my opinion that if the US had anything resembling a functioning government it would take note of this bottleneck, come up with a plan to end it, and then implement that plan.
Instead, we just made some of the world’s least efficient ports even less efficient.
Even worse, that was our best available option.
Anyone want to tell me how idiocy this broad and deep can last much longer?
MCS: Nice link to Sal’s interview. I love his guest, what a character, and Sal did a nice job guiding it through
I see a few structural issues to the ILA negotiations.
The first is while I depicted Daggett as a cartoon villain he does look like to be a good union head, he isn’t there to be loved by everyone but to get the best deal possible for his members. Having said that I’m not sure anyone outside of the unions has any sympathy for his members, they make an amazing amount of money, though I would like to the median wage level to see how many are making the $150,000 annual wage I’m seeing quoted, for blue collar work that to be honest I doubt is THAT skilled to justify. How long would it take to spin-up a new crane operator? Or further down the line a container-handler? I found Malone’s depiction of ILA workers as heroic for working during COVID laughable, sounds good PR but they were very well compensated for their work and a lot of people wish they had that opportunity
The biggest advantage the ILA has in the short-term and their biggest problem long-term is that they hold a strategic position along the supply chain. Unlike a UAW worker of old, the port jobs cannot be outsourced to Japan, the demand for ILA services is dictated by users inside the US who need those goods and that it can’t be outsourced. This gives them to be ability to be dug-in on the high ground in the short to medium term as toll collectors (or if you like rent-seekers) and gives them negotiating leverage.
Long-term they are on shaky ground. What automation in foreign ports provide is hard data of benchmarks. The ILA is essentially placing their services and costs in direct competition with those ports; if I’m downstream in the supply chain or a shipper I have a direct interest in knowing what the metrics of what automation can provide in terms of cost per container and speed (meaning time my valuable ship is in port waiting to be unloaded) As an ops manager, container handling is all cost and I’m looking for max efficiency – the ILA is dancing with a train because in reality they are in the extortion business, they want to get max money out of the ports and shippers, but they cannot go so high that they kill the golden goose.
Shipping has become very low margin. Ships have to be kept at sea the maximum amount of time. There are calculations about the right speed to balance fuel consumption vs. transient time, every day a ship waits to be unloaded is basically an additional valuable day of business lost.
How would they kill the golden goose? The shipping industry for the past 70 years has moved sharply in the direction of innovation and low-margins. I laughed when Sal and Malone discussed Malcom McLean and that guy who wanted to torpedo that container ship because nothing hurt the longshore unions more than the container and we still haven’t seen the innovation curve of that technology fully play out. I loved that graph showing profits for the shipping industry, it’s a cyclical low-margin business and the ILA is pointing to the recent transient phenomena of high profits – that’s a short-term bump, the industry heads toward low-margin high-capacity
What the ILA is working against is the difference between being able to control automation through phase-in and being completely abandoned by the 21st Century version of Malcom McLean. McLean didn’t just innovate shipping with the container but also how ports operated and therefore spurred the development of new ports – look how shipping switched from NYC to Newark because of him. He helped spur a downstream boom, a bubble really, of public investment in new container ports in the US as localities saw a container port as economic development
If the ILA becomes too much of a cost, there’s going to be an opening for a new wave of container port construction but this time with all the automation the union detests and none of the union at all. The The ILA jobs wouldn’t be exported to Japan like the UAW ones were, they are going to be exported to another port in the US maybe as close as Newark was to NYC. Those automated ports already provide hard data on benchmarks and there a huge constituency among domestic manufacturers and retailers for low-cost port operators. The public side wouldn’t come from the feds but locals using bond, econ development money
Daggett’s rhetoric about crippling the economy is a one-time card, in reality an empty boast. If he does follow-through he wins short-term on this contract but everyone else will make sure the ILA is never in a position to do it again. Then again the guy is what? In his 70s? So he’s thinking short-term because this will be the last contract he negotiates.
And just like that….. it ends
Port strike deal ends no-win dilemma for Democrats
I stick with my original analysis in the previous comment. The situation the ILA is dealing with is not the export of jobs but rather the potential of new port entrants that will be automated. There is of course a high capital cost in doing so and that’s the boundary for ILA’s scope of action
It really isn’t ending. Just a return to negotiations while the interim pay goes up to exactly the middle between demand and offer.
Hate to say it, but if the government had a hand in pushing this temp solution, good on them. Deadly and huge hurricane across their servicing coast, US election in less than 40 days, arms going out on ships to Israel and Ukraine – this is NOT the time to have a complete-East-Coast dock strike.
I’m guessing someone put the fear of Neptune into the longshoremen – you don’t pull this crap during this particularly tense period or we’ll make things worse for you, which they can do. So negotiations will just keep going. It’s like Biden declared the Taft-Hartley cooling period . . . silently.
The purpose of the strike delay was to take the pressure off of the ruling Leftists who would bear the brunt of all the public disquiet as the economy fell apart between now and any putative election in November. If there is a credible election in November, if the Leftists win not only the Longshoremen but every other union will be seeking the same kind of pay raises. And doing so with the support of the ruling regime who will blame the evil Kulaks.
If President Trump wins, the strike will go back on with the goal of destroying as much of the American economy as possible and blaming President Trump and the Kulaks. These are interesting times.
Subotai Bahadur
Something that I wouldn’t have believed:
https://nypost.com/2024/10/04/business/how-did-50k-dockworkers-strike-at-us-ports-with-only-25k-jobs/
We, because all of us ultimately pay for this, are paying someone to sit at home for each actual longshoreman.
We are already forced at gunpoint to pay the living expenses for millions of foreign colonists.
What’s a few thousand extra longshoreman?
Fire them of course, but at least they likely speak English.
Presumably, anyone displaced by the automation the union is fighting will remain on the payroll in perpetuity. I wonder if it’s hereditary? Maybe that’s for the next contract. This is the first time I have seen no-show jobs as part of the actual contract. Undoubtedly, the union also restrict the number of active workers so they can rack up insane amounts of overtime as well.