More than 40,000 port workers on the East and Gulf coasts may go on strike Oct. 1.
The International Longshoremen's Association (ILA) contract at three dozen ports expires at midnight on Sept. 30. Negotiations between the ILA and the United States Maritime Alliance (USMX) have turned contentious.
"USMX knows what our bottom line with wages needs to be for our ILA rank-and-file to ratify a new master contract agreement," said Harold J. Daggett, ILA International president and chief negotiator, on Monday. "They call me several times each week trying to get the ILA to accept a low-ball wage package. My ILA members are not going to accept these insulting offers that are a joke considering the work my ILA longshore workers perform and the billion-dollar profits the companies make off the backs of their labor."
USMX says the U.S. Department of Labor, the Federal Mediation and Conciliation Service (FMCS) and other agencies have been in touch. USMX says it is open to working with the FMCS if both sides agree to mediation.
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"Despite additional attempts by USMX to engage with the ILA and resume bargaining, we have been unable to schedule a meeting to continue negotiations on a new master contract," USMX said in a statement Monday. "We remain prepared to bargain at any time, but both sides must come to the table if we are going to reach a deal and there is no indication that the ILA is interested in negotiating at this time."
Affected ports range from New York and New Jersey to Savannah and around the Gulf to Houston.
The National Association of Manufacturers says the affected East and Gulf coast ports represent an average daily trade value of more than $2.1 billion. More than 68% of containerized exports and more than 56% of containerized imports flow through these ports. They process more than 76% of containerized vehicle exports and more than 54% of containerized vehicle imports.
"A strike at this point in time would have a devastating impact on the economy, especially as inflation is on the downward trend," the NAM said in a statement.
Republican members of the House Transportation and Infrastructure Committee and the House of Representatives urged the Biden administration last week to do everything in its power to stop a potential work stoppage.
"Given the devastating economic consequences of a potential strike and the administration's lack of engagement to date, we urge you to give immediate attention to this matter, to aid in these negotiations and find a reasonable resolution to these contract disputes," 69 members of Congress said in a letter to the White House.
The administration says it will not force union members to return to work. The letter continued that estimates suggest a one-week strike would take until mid-November to recover. A two-week strike could take into 2025 to clear port backlogs.
Bethann Rooney, port director for the Port Authority of New York and New Jersey, says the port is preparing for a work stoppage Oct. 1.
"The Port Authority of New York and New Jersey, our container terminal operators and intermodal rail providers are fully dedicated to ensuring continuity of operations and to minimizing any disruption to your supply chain as best we can," Rooney said.
Import cargo will need to be picked up by Sept. 30, she continued, and export traffic will halt the same day. Container terminals are offering additional gate hours as the port authority expects heavy traffic.
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Port Houston is enacting a similar plan, with extended hours before and possibly after to help clear backlogs.
The Retail Industry Leaders Association (RILA) is concerned about the effects of a strike on American supply chains.
"The ripple effects of a strike — port congestion, vessel delays and missed shipments, increased shipping costs, inventory challenges and more — all amount to yet another round of supply chain disruption and uncertainty," it said in a statement Tuesday. "Given the current contract expiration date has been on the calendar for years, retailers view this strike and its imminent disruption as a self-inflicted wound to the U.S. economy. It is unfortunate that talks were seemingly stalled to prepare for a strike rather than to continue forward and find a solution. And although retailers have already activated contingency plans to help mitigate its effects, the longer a work stoppage goes on, the harder it will be to do so."
ACT Research says freight rates are low as the strike date nears.
"Even with more private fleet capacity in the spot market than ever before, overall spot capacity continues to be slowly whittled away by low rates," said Tim Denoyer, vice president and senior analyst. "Freight demand continues to grow broadly, through private fleets are handling the growth and insourcing. While general merchandise retail trends are positive enough to suggest a decent peak season for freight volumes overall, some sectors are struggling, so spot conditions are unlikely to improve much."
Uncertainty, including around the upcoming election, may continue to depress equipment demand.
"The next few months are set to be contentious and decision-makers planning next year's fleets face immense uncertainty," he says.