Amid Ports Strike, Note That Shipping Giant Maersk Spent $6.5 Billion on Stock Buybacks

Amid a strike that dockworkers along the East and Gulf Coasts argue is about "corporate greed vs. workers rights," a watchdog group is highlighting how at least one shipping giant on the other side of the labor battle has recently poured billions of dollars into stock buybacks.

Around 45,000 members of the International Longshoremen's Association (ILA) walked off the job at 12:01 am Tuesday after unsuccessful negotiations with the United States Maritime Alliance (USMX), a shipping industry group that includes Maersk.

In an analysis released Wednesday, Accountable.US pointed out that as part of Maersk's $12 billion stock buyback program, the Danish shipping company "has spent $6.5 billion buying back nearly 3 million Class A and B shares as of January 2024."

"When the big shipping industry was faced with a choice—share its success with the U.S. workers that delivered it, or go overboard with greed—its executives clearly chose the latter."

When companies pursue stock buybacks—also called share repurchases—they reduce the number of shares available on the market, which inflates earnings per share, enriching shareholders. The practice has fueled calls to hike the U.S. corporate tax rate.

Maersk paused its buybacks in February. CNBCreported at the time that the company "flagged 'high uncertainty' in its 2024 earnings outlook amid Red Sea disruptions and an oversupply of shipping vessels."

Still, Accountable.US framed what Maersk has done so far as proof that the shipping giant and fellow USMX members have the capital to end this strike, as ILA president Harold Daggett asserted this week.

"The same foreign-owned shipping giants that say they can't find the money for fairer wages and treatment of American port workers managed to find billions of dollars to enrich a small group of wealthy investors after riding a wave of record profits," said Liz Zelnick, director of the Economic Security & Corporate Power Program at Accountable.US, in a statement.

"When the big shipping industry was faced with a choice—share its success with the U.S. workers that delivered it, or go overboard with greed—its executives clearly chose the latter," Zelnick added.

The watchdog also took aim at COSCO Shipping Holdings, which last year "announced plans to buy back up to $101 million of its A shares, with plans for further buybacks, after reporting an 'industry-beating' profit of $2.7 billion in the first half of 2023."

Meanwhile, amid concerns about the economic fallout from the strike, the tens of thousands of striking ILA port workers emphasize that they are eager to return to work, but need a contract with wage increases and protections from automation.

"The action is going to give us a fair contract and we can get back to work to get people the goods they need," Joe Mosquera, a crane operator and union organizer with ILA, Local 1235, toldThe Guardian Thursday. "This is for our future generations. To keep automation out is to keep our jobs for the future. And if anything becomes automated, we want to make sure that there's a worker to back it up."

The industry's biggest strike since 1977 is already having an impact. Citing Everstream Analytics, Reutersreported Thursday that "at least 45 container vessels that have been unable to unload had anchored up outside the strike-hit East Coast and Gulf Coast ports by Wednesday, up from just three before the strike began on Sunday."

The workers are backed by U.S. President Joe Biden—who is empowered by an anti-union federal law to break the strike but has signaled he won't—and various pro-worker lawmakers, including the congressional Labor Caucus, co-chaired by Reps. Debbie Dingell (D-Mich.), Steven Horsford (D-Nev.) Donal Norcross (D-N.J.), and Mark Pocan (D-Wis.).

"We stand in solidarity with the ILA workers in their fight for a fair contract with USMX," the caucus said in a statement shared by the union Wednesday. "We've seen unions secure historic contracts for workers across the country in recent years, and now ILA workers—who kept our economy moving throughout the pandemic—are fighting for their share of the profits they helped create."

"Contract negotiations can be difficult at times, but collective bargaining is the best way for workers and employers to come to a fair agreement," the caucus added. "We encourage all parties to remain at the bargaining table and negotiate in good faith to reach a fair contract that reflects the success of the companies."