Many ports in the US East and Gulf coasts are bracing for a shutdown amidst the collapse of talks between major dock workers and their employers.
Key industry and government officials are reportedly urging US dockworkers and their employers to avoid a strike.
The US Maritime Alliance, a group representing ocean carriers and port terminal operators, and the International Longshoremen’s Association, however, have no talks planned before their contract expires at the end of Monday, Bloomberg reported.
“We are coordinating with partners across the supply chain to prepare for any potential impacts,” the Bloomberg report quoted Steve Burns, a spokesman for the Port Authority of New York and New Jersey, the nation’s busiest Atlantic gateway for containers, as saying.
“We urge both sides to find common ground and keep the cargo flowing for the good of the national economy,” Burns said.
President Joe Biden said Sunday he wouldn’t intervene in any dockworkers strike.
Resolving the dispute is a matter for collective bargaining, he told reporters in Delaware.
In a statement released Sunday, ILA Chief of Staff James McNamara said the union is “joined in solidarity by tens of thousands of dockworkers and maritime workers around the world,” adding that it will update the public with any new developments by Monday at 11 AM New York time.
The stalemate sets the stage for a strike to start the following day, forcing ports with the combined capacity to handle as much as half of all US trade volumes to halt container cargo and auto shipments.
Energy supplies and bulk cargo like municipal waste and road salt won’t be affected, and some exceptions will be made to allow for the movement of military goods and cruise ships.
To help break the impasse, the Biden administration summoned USMX, as the employer group is known, to the White House on Friday for a meeting with senior officials to urge a return to negotiations, and said they’d been in touch with the union to deliver the same message.
Speaking on condition of anonymity, a White House official said the administration will also be watching freight rates and surcharges imposed by ocean carriers, and doesn’t want to see anti-competitive price moves.
The two largest container lines have already announced plans to impose extra fees tied to work stoppages.
If a strike goes ahead, it’ll be the first major labour disruption at US maritime hubs since a nine-month standoff in 2014-15 led to work slowdowns and reduced productivity at ports on the West Coast.
The last ILA strike on the East Coast was in 1977.
USMX is now alleging the union has refused to bargain since calling off talks back in June, and asked the National Labor Relations Board to force the dockworkers to negotiate.
The ILA wants assurances against job-reducing automation, and counters that its members are owed a bigger cut of the “billions of dollars in revenues and profits” shipping lines have made in recent years.
The economic pressure for federal intervention will only build if important gateways are paralyzed for more than a few days.
Oxford Economics estimated that a strike would cost the US economy $4.5 billion to $7.5 billion a week — a hit to gross domestic product that would be reversed after it’s over and shipments resume.
According to Oxford Economics, East and Gulf Coast ports are major players in handling exports and imports of raw materials including copper, cotton, tin and wood, as well as base metals used in manufacturing.
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