Private equity's role in America's ports
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Illustration: Lindsey Bailey/Axios
America dodged a sledgehammer on Thursday night, when striking stevedores reached a tentative agreement to return to work.
The big picture: It sounds like the White House successfully cajoled the employers into boosting their wage offer, up to a reported 62% raise over six years, but the two sides couldn't come to terms on the future of port automation and semi-automation.
- Negotiations will continue while workers are on the dock, with the master agreement extended until Jan. 15, 2025 (when it could become the next president's problem).
Behind the scenes: Private equity wasn't directly at the table, but it was represented.
- Most U.S. ports are controlled by quasi-public entities, like port authorities, while the actual cargo terminals are usually owned by private companies.
- The largest and oldest of those in the U.S. is Carrix, the parent company of SSA Marine, which is controlled by Blackstone.
- Another major marine terminal owner and operator is Maher, which is owned by Australian investment firm Macquarie.
Why it matters: Private equity's involvement means that the union doesn't really know how much money many of the employers make, despite claiming to know.
- Carrix, for example, hasn't reported its financials since Blackstone's buyout in 2021.
- Moreover, many of the other relevant marine companies are closely held European groups that also keep their revenue and profit data secret.
Zoom in: Nonetheless, union boss Harold Daggett has insisted that the marine companies are "greedy bastards" that earn "hundreds of billions of dollars."
- For example, Daggett recently claimed that Italian cargo shipper MSC "made three times the money of Amazon." But that was cherry-picked data based on leaked MSC financials for the one year in nearly a decade that Amazon recorded a net loss. In general, Amazon's top and bottom lines are much higher.
- Then again, Daggett also said in that interview that "Companies that work in the maritime business come from overseas — not only of them belong to America." That would come as a surprise to Seattle-based Carrix.
- A spokesman for the International Longshoreman's Association didn't respond to an interview request about employer profits.
The bottom line: Private equity has permeated all parts of America's economy, including its ports. That makes it much more complicated to suss out who's in the right when vital work comes to a halt.
