US dock strike hours away as dock workers union attacks employers

The International Longshoremen’s Association (ILA) on Monday accused the alliance representing employers operating in more than a dozen major ports of stalling negotiations, paving the way for a devastating strike to begin in about 12 hours.

The ILA represents more than 85,000 workers and has been negotiating with companies, terminal operators and port associations represented by the United States Maritime Alliance (USMX) since last May. Thousands of East Coast and Gulf Coast workers are set to strike at 12:01 a.m. ET on Tuesday.

“The ocean carriers represented by USMX want to enjoy the rich billions of dollars in profits they are making in 2024 while offering ILA Longshore workers an unacceptable wage package that we reject,” the ILA said in a statement.

“It is shameful that most of these foreign transport companies are engaged in a ‘Make and take’ operation,” the union continued. Many members of the alliance are foreign organizations, such as the Danish shipping firm Maersk (AMKBY) or China’s state-owned Cosco Shipping (CHICOY).

Both Maersk and Cosco were hit by the ILA for not translating their profits into better wages for liquidators. Cosco, for example, posted revenues of $63.22 billion in 2022, according to the ILA, while Maersk took home more revenues of over $51 billion last year.

Read more: A major US port strike could soon rock the economy. Here’s what you need to know

USMX last week filed an unfair labor practice charge and asked the National Labor Relations Board to require the union to resume negotiations. The White House and several federal agencies have moved to help the sides negotiate and avoid walkouts that could devastate the national economy.

Ports and facilities handling about 51% of the nation’s total port capacity would be affected by the potential withdrawals, according to Miter Corporation. A strike would affect nearly every industry, delaying everything from shipments of foreign fruit to supplies for automakers and pharmaceutical companies.

The potential damage from such a strike is expected to cost somewhere between $1 billion and 5 billion dollars a dayaccording to Container xChange and JP Morgan shipping container market analysis (JPM). Oxford Economics said a prolonged strike could affect up to 100,000 jobs and reduce US economic activity by between $4.5 billion and $7.5 billion for each week it lasts.

“Congestion and delays at these major ports will severely impact container availability, increase costs and disrupt schedules,” said Christian Roeloffs, CEO of Container xChange, whose company works with over 1,500 shipping companiesit said in a Thursday advisory to clients.

Shipping companies, including USMX members, began making adjustments and warning customers to get their affairs in order ahead of the strike.

Hapag-Lloyd (HPGLY) intends to implement a “the surcharge intended for the interruption of work” for imports to the US Gulf and East Coast. Maersk has issue a similar surcharge that will take effect on October 21, depending on the impact of the potential disruption on the supply chain. Another major player, CMA GCM, announced on 17 September a series of changes to its port tariffs, which will come into force on 11 October.

“It’s unheard of and they’re doubling their $30,000 fee for filling the same container from multiple shippers,” the ILA said Monday, broadly referring to companies adding surcharges because of the potential work stoppage. “They’re killing customers.”