U.S. ports along the East and Gulf Coasts are set to close on Tuesday, with the union representing tens of thousands of dockworkers and an industry group representing port operators and shipping companies at loggerheads over a new labor contract.
Experts warn that prolonged work stoppage could lead to higher costs on goods around the nation and create shortages ahead of the holiday shopping season. A one-week strike could cost the economy nearly $3.8 billion and increase the cost of consumer goods, according to the Conference Board, which called the situation a “political minefield” given that it comes just ahead of the November presidential election.
Other estimates of the potential economic hit also suggest the strike could take a toll, although the losses would likely amount to a small fraction of the nearly $29 trillion U.S. economy.
“A port strike could cost the U.S. economy billions of dollars a day, hurting American businesses, workers and consumers across the country,” Business Roundtable CEO Joshua Bolten said in a statement this weekend. “We urge both sides to come to an agreement before Monday night’s deadline.”
Such a breakthrough seemed unlikely as of late Monday afternoon.
The contract between the International Longshoremen’s Association (ILA) and the United States Maritime Alliance (USMX), which represents the ports and ocean carriers, expires at midnight Monday. A strike is set to officially kick off as of 12:01 Eastern Time on Tuesday, according to the ILA.
The two sides haven’t been at the bargaining table since June, and as of Monday afternoon there was little sign that they were set to resume talks.
A total of 14 ports involving some 25,000 workers could be affected by the strike, according to USMX: Baltimore; Boston; Charleston, South Carolina; Jacksonville, Florida; Miami; Houston; Mobile, Alabama; New Orleans; New York/New Jersey; Norfolk, Virginia; Philadelphia; Savannah, Georgia; Tampa, Florida; and Wilmington, Delaware.
The ILA is demanding sizable wage hikes and a complete ban on the use of automated cranes, gates and container-moving trucks in unloading or loading freight at ports handling about half of the country’s ship cargo.
“The ocean carriers represented by USMX want to enjoy rich billion-dollar profits that they are making in 2024, while they offer ILA longshore workers an unacceptable wage package that we reject,” the union said in a statement on Monday.
USMX did not immediately return a request for comment.
If a strike were deemed to threaten national health or safety, under the Taft-Hartley Act President Joe Biden could seek a court order requiring an 80-day cooling-off period. But Biden administration officials have repeatedly said he would not take to action to prevent a strike and that the contract dispute should be resolved through collective bargaining.
“Senior officials have been in touch with USMX representatives urging them to come to a fair agreement fairly and quickly — one that reflects the success of the companies. Senior officials have also been in touch with the ILA to deliver the same message,” White House spokesperson Robyn Patterson said.
With the first strike by the ILA at East and Gulf Coast cargo terminals since 1977 seemingly imminent, officials in New York and New Jersey have been working to minimize any potential supply-chain disruptions, setting up trucks to transport food and medical supplies.
Fuels like home heating oil and diesel gas are transported in ways that wouldn’t be impacted by a strike, New York Gov. Kathy Hochul said in a news conference on Monday, although she noted that the “potential for disruption is significant.”
New York does not expect shortages of essential goods anytime soon, so there’s no need to run to the grocery store and stockpile goods as occurred during the pandemic, Hochul said. Although there might be shortages of individual food items. such as bananas, should a strike persist longer than a few weeks, the state would continue to get food shipments from major markets including Canada, California and Mexico, as well as from New York itself, the governor added.
The automobile industry could feel a more immediate impact, however, with Hochul cautioning would-be buyers to call ahead.
“If you’re expecting a new car this week, it may be something you want to check with your dealer. It may not be arriving, for example, in the next few weeks,” she warned.
