US East Coast dock workers strike, blow to shipping imports, exports By Reuters

By Doyinsola Oladipo

NEW YORK (Reuters) – Port workers on the U.S. East Coast and Gulf Coast began a strike on Tuesday, halting the flow of about half of the nation’s shipping, after negotiations for a new labor contract broke down over wages.

The strike is blocking everything from food to car shipments at dozens of ports from Maine to Texas, in a disruption analysts warn will cost the economy billions of dollars a day, threaten jobs and fuel inflation.

The International Longshoremen’s Association (ILA), which represents 45,000 dock workers, had been negotiating with employers’ group the United States Maritime Alliance (USMX) for a new six-year contract ahead of a September 30 midnight deadline.

“As a result of the expiration of the framework agreement between the United States Maritime Alliance (USMX) and the International Liquidators Association (ILA), there is a work stoppage at the Port of Virginia and other ports along the US East and Gulf Coasts,” the Virginia Port Authority said in announcing the shutdown.

USMX and the union did not immediately respond to requests for comment.

But fiery ILA leader Harold Daggett said previous employers such as container operator Maersk and APM Terminals North America had not offered adequate pay rises or accepted demands to halt port automation projects. USMX said in a statement Monday that it has offered to raise wages by nearly 50 percent.

The ILA said in statements on Sunday and Monday that a strike at the port will take place beginning at 12:01 a.m. ET on Tuesday.

The strike, the first by the ILA since 1977, worries businesses across the economy that rely on shipping to export goods or secure crucial imports. The strike affects 36 ports that handle a wide range of containerized goods, from bananas to clothing and cars.

The union “holds the whole country over a barrel,” said Steve Hughes, CEO of HCS International, which specializes in automotive supply and transportation. “I’m very afraid it will be ugly.”

The dispute also puts pro-labor US President Joe Biden in a virtual no-win position, while Vice President Kamala Harris leads a tight race against former Republican President Donald Trump.

Biden administration officials met with both the USMX and the ILA before the strike to encourage an agreement. But the Biden administration has repeatedly ruled out using federal powers to break a strike in the event of a deadlock.

US Chamber of Commerce President Suzanne Clark on Monday urged Biden to reconsider, saying it would be “unthinkable to allow a contract dispute to cause such a shock to our economy.”

Retailers that account for about half of container shipping volume have been busy implementing back-up plans as they head into their big winter holiday sales season.

Many of the big players rushed to get Halloween and Christmas goods in early to avoid any strike-related disruptions, incurring extra costs to ship and store those goods.

Walmart (NYSE: ), the largest U.S. container shipper, and member warehouse club operator Costco (NASDAQ: ) say they are doing everything they can to mitigate any impact.

New York Gov. Kathy Hochul said Monday that the state does not expect any immediate impact on food suppliers or essential goods.