Pending Port Strike On East And Gulf Coasts Could Cost Billions Daily, Slow Shipments
A potential work stoppage by the International Longshoremen’s Association on Oct. 1 could cost the U.S. economy $5B daily.
That amounts to about 6% of the nation’s gross domestic product, according to JPMorgan transportation analysts. And for every day docks on the East and Gulf Coasts are without workers, it could take six additional days to get caught up on shipments.
The labor contract between the port terminal operators’ United States Maritime Alliance and the ILA is set to expire Sept. 30, and businesses have ramped up imports and sent shipments to the West Coast to get ahead of it, The New York Times reported.
A new contract with a different union is already in place on that coast.
The 85,000-member ILA hasn’t met in person with the maritime alliance since June, though the Federal Mediation and Conciliation Service has gotten involved to avert a crisis.
Meanwhile, trade groups asked for urgent assistance from the Biden administration in a letter last week, but administration officials have said the president does not plan to invoke the 1947 Taft-Hartley Act, the NYT reported. That act would authorize the president to force dockworkers to return to the job.
On Monday, ILA officials said if ports on the East and Gulf Coasts are shut down, it will be because of the maritime alliance.
“They call me several times each week trying to get the ILA to accept a low-ball wage package,” ILA International President and chief negotiator Harold Daggett said in a statement. “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.”
It’s been nearly 50 years since a strike closed all East and Gulf Coast ports. It last happened in 1977.
“I’m very unhappy,” National Tree Co. CEO Chris Butler told the NYT. “We’re doing everything we can to mitigate it. But there’s only so much you can do when you’re at the mercy of these ports.”
Butler said his company has increased its use of West Coast ports and brought products in earlier to prepare for the Christmas season. Still, around 15% of his company’s products may not make it into the country if there is a port strike, he said.
The potential strike would be the latest in a series of problems for East Coast ports this year.
In March, cargo ships and barges were diverted from the Port of Baltimore following a collapse of the Francis Scott Key Bridge that killed six people and shut down that shipping hub. Ships were then diverted to Philadelphia and Camden, New Jersey, which caused its own shipping disruption.
With more shipments going to the West Coast ahead of the potential strike, the ports of Long Beach and Los Angeles are seeing similar numbers to what they dealt with in 2021-22 due to the pandemic shipping boom.
