Dockworkers on the U.S. East Coast and Gulf Coast are expected to go on strike Tuesday morning after a midnight deadline expired with no sign of a new contract agreement with port owners. The strike is expected to halt about half of the country’s shipping.
The strike will block everything from food to automobiles at dozens of ports from Maine to Texas, in a disruption that analysts say will cost the economy billions of dollars a day, threaten jobs and will fuel inflation.
The International Longshoremen’s Association (ILA), which represents 45,000 port workers, was negotiating a new six-year contract with the employer group United States Maritime Alliance (USMX) before a deadline of midnight on September 30.
But Harold Daggett, the head of the ILA, said employers such as container ship operator Maersk and its subsidiary APM Terminals North America had not offered appropriate pay increases or had not accepted requests to stop port automation projects. The USMX said in a statement Monday that it had proposed raising wages by nearly 50%.
The ILA said on Sunday and Monday that a port strike would take place starting Tuesday at 12:01 p.m. ET.
The strike, the ILA’s first since 1977, worries businesses across the economy that rely on shipping to export their goods or secure crucial imports. The strike affects 36 ports that handle a range of containerized goods, from bananas to clothing to cars.
The union is “putting the entire country into a corner,” said Steve Hughes, CEO of HCS International, which specializes in automotive sourcing and shipping. “I really fear that the situation will become horrible.
The conflict also puts pro-worker U.S. President Joe Biden in a virtually no-win position as Vice President Kamala Harris leads a tight election race against former Republican President Donald Trump.
Representatives of the Biden administration had met with the USMX and ILA before the strike to encourage an agreement. But Mr. Biden’s administration has repeatedly ruled out using federal powers to end a strike in the event of an impasse.
On Monday, US Chamber of Commerce President Suzanne Clark urged Biden to reconsider, saying it would be “unconscionable to allow a contract dispute to inflict such a shock on our economy.” .
Retailers, which account for about half of total container shipment volume, have been working to put contingency plans in place ahead of the holiday season, a very important time for the economy.
Many of the big players rushed into Halloween and Christmas merchandise to avoid any strike-related disruption, leading to additional costs for shipping and storing those merchandise.
Retail giant Walmart, the largest container shipper in the United States, and warehouse club operator Costco say they are doing everything they can to soften the impact of the strike.
New York Governor Kathy Hochul said Monday that the state does not expect immediate impacts on suppliers of food or essential goods.
