As the strike deadline approaches, there is a glimmer of hope for reaching an agreement between the union representing 45,000 dockworkers and the employer group representing East Coast and Gulf Coast ports, as they exchange wage proposals to avoid a massive shutdown.
The International Longshoremen’s Association (ILA) has threatened to strike at one minute past midnight on Tuesday, October 1, a move that could potentially paralyze ports handling about half of the ship cargo entering and exiting the United States.
On Monday, September 30, the United States Maritime Alliance (USMX), representing 36 ports from Maine to Texas, released a statement indicating a change in stance. The alliance stated that they have submitted a new offer and requested the union to extend the current contract.
The latest offer from the alliance includes nearly a 50% increase in wages over a six-year contract, doubling employer contributions to retirement plans. The proposal also enhances healthcare benefits and maintains clauses restricting automation projects at the docks.
“We hope this will allow us to fully resume negotiations on other outstanding issues to reach an agreement,” the alliance stated in its announcement.
The union is demanding a 77% wage increase over the six years to combat inflation. While many dockworkers already earn over $200,000 annually, the union argues that they often have to work extensive overtime to reach that figure.
In addition to wage hikes, the International Longshoremen’s Association is calling for a complete ban on the use of automated cranes, gates, and container handling equipment during cargo loading and unloading processes.
Since June, formal negotiations have not taken place between the two sides, and a strike seems imminent. The union issued a statement on Monday morning, stating that the ports had rejected their request for a fair contract. Wage negotiations between the parties had hit a stalemate at one point.
Rick Cotton, head of the Port Authority of New York and New Jersey, announced on Monday that starting from 5 p.m. Eastern Time, the docks would be closed, leaving nearly 100,000 containers stranded at the port until the strike ends. An additional 35 ships are expected to arrive at the port within the next week, where they will remain anchored during the strike.
Jay Dhokia, founder of supply chain management and logistics company Pro3PL, noted, “If the strike continues, it will cause severe delays across the entire supply chain, with ripple effects likely to extend into 2025, plunging the industry into chaos.”
Dhokia added that concerns ahead of the strike had already caused many goods to reroute to the West Coast, worsening congestion on shipping routes and placing additional strain on demand. He stated that the strike’s impact would also reverberate globally, especially affecting countries like the UK, one of the largest trading partners with the US.
JP Morgan analysts estimate that the strike could cost the US economy about $5 billion per day, as busy ports like New York, Baltimore, and Houston face disruptions in transporting food, retail goods, and other products.
If the strike lasts for weeks, it could lead to delays in delivering goods to households and businesses, potentially causing supply shortages and price hikes.
Retailers account for half of container shipments. Many major retailers have been stockpiling Halloween and Christmas goods in advance to mitigate any disruptions caused by the strike.
The strike by the International Longshoremen’s Association workers will affect ports from Maine to Texas and marks the union’s first strike since 1977. West Coast dockworkers belong to a different union and will not be participating in the strike.
If the strike is deemed a threat to the economic health of the US, President Biden can seek a court order under the 1947 Taft-Hartley Act to request an 80-day cooling-off period to temporarily halt the strike. The act allows the president to compel workers to return to work during negotiations.
US Chamber of Commerce President Suzanne Clark urged Biden to use his powers to prevent the strike, stating that “allowing a contract dispute to have such a detrimental impact on our economy is unreasonable.” Biden, however, stated on Sunday that he does not plan to intervene.
White House Chief of Staff Jeff Zients and Chief Economic Adviser Lael Brainard held a meeting on Monday with the board members of the United Auto Workers, urging them to fairly and swiftly resolve the dispute.
(This article references reports from the Associated Press and Reuters)