Time is running toward a port strike, and there is little hope that it can be avoided

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CNN
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Time is running out to avoid a work stoppage at ports across the East and Gulf Coasts, which could become the most devastating strike for the U.S. economy in decades.

Members of the International Longshoremen's Association will strike at three dozen facilities in 14 port authorities starting at 12:01 a.m. ET on Tuesday. There are few signs that an agreement may have been reached within the deadline set by the ILA and the United States Maritime Alliance, which uses the acronym USMX. The maritime alliance represents the major shipping companies, all of which are foreign-owned, as well as terminal operators and port authorities.

The strike, which would be the first at these ports since 1977, could halt the flow of a variety of goods through the docks of almost every cargo port from Maine to Texas. This includes everything from bananas to European beer, wine, and spirits to furniture, clothing, household goods, and European automobiles, as well as parts needed to run U.S. factories and the work of American workers in those factories. It could also result in a halt to U.S. exports currently flowing through these ports, hurting the sales of American companies.

Depending on the duration of the strike, there could be shortages of consumer and industrial goods, which could then lead to price increases. It would represent a setback for the economy, which has shown signs of recovery from pandemic-related supply chain disruptions that have led to a rise in inflation.

While the union says about 50,000 members are covered by the contract, the USMX estimates the number of port jobs closer to 25,000. There are not enough jobs for all workers in the union to work every day.

The ports involved include the Port of New York and New Jersey, the third largest port in the country by cargo volume handled. But ports with other specialties are also included.

Port Wilmington, Delaware bills itself as the country's premier banana port, carrying a large share of America's most popular fruit. According to the American Farm Bureau, 1.2 million tons of bananas are passing through ports that could go on strike next week, accounting for about a quarter of the country's banana production.

Other perishable goods such as cherries and a large proportion of imported wine, beer and liquor are also transported through the ports. Raw materials from US food producers such as cocoa and sugar are also transported through the ports.

And many durable goods such as furniture and appliances are also transported through the ports. Retailers have been rushing in recent months to deliver the imported products they want to sell during the holiday season before the Oct. 1 strike deadline.

The Port of Baltimore, which was briefly closed in March after the Key Bridge collapse, handles the largest volume of auto imports in the country.

The union has pledged to continue handling military cargo during a strike and said passenger ships would not be affected. Oil tankers and ships carrying liquefied natural gas typically head to other facilities not affected by the strike, as do bulk carriers carrying things like grain. But almost all other ports along both coasts could also be affected.

USMX claims the union refuses to bargain in good faith says the two sides have not met in person since June.

“We remain ready to negotiate at any time, but both sides must come to the table if we are to reach an agreement and there is no indication that the ILA is interested in negotiating at this time,” the management group said in a statement last week Explanation,

USMX has offered wage increases of more than 40% over the life of the six-year contract, according to a person familiar with negotiations. The ILA is not discussing its demands publicly, but is reportedly asking for annual salary increases that would result in total increases of 77% over the life of the contract, with the top wage increasing from $39 an hour to $69.

The union says it has continued to speak with USMX, but not in face-to-face negotiations. It said management knew what it was asking to reach an agreement and that any strike was management's fault, not the union's. Given the level of profits in the shipping industry, the demands are reasonable.

“My ILA members will not accept these insulting offers, which are a joke given the work my ILA longshoremen do and the billions in profits the companies make from their work,” said Harold Daggett, international president and chief the ILA negotiator said in a recent statement.

Shipping costs skyrocketed during and immediately after the pandemic as supply chains collapsed and demand increased. According to analyst John McCown, the industry's profits totaled over $400 billion between 2020 and 2023, which is believed to be more than the industry had generated in total since containerization began in 1957.

Business observation and concerns

Companies that rely on the movement of goods are on the sidelines and are watching developments with great concern.

More than 200 business groups sent a letter to the White House last week calling on the Biden administration to intervene to prevent a strike, saying the country relies on both imports and exports moving through those ports .

“The last thing the supply chain, companies and employees … need is a strike or other disruption due to ongoing collective bargaining,” the letter said.

The letter does not specifically spell out what action needs to be taken, but it does imply that President Joe Biden should exercise powers under the so-called Taft-Hartley Act, which went into effect in 1947. President George W. Bush used the law in 2002 to stop an 11-day lockout of union members at West Coast ports.

The Biden administration said it was following the talks closely and encouraged the parties to negotiate in good faith to reach an agreement. Acting Labor Secretary Julie Su, Transportation Secretary Peter Buttigieg and National Economic Council Director Lael Brainard met with USMX officials to urge the management group to work toward an agreement to avoid the strike. The ILA was also invited to the meeting but declined to attend, a knowledgeable source told CNN. Union leadership had publicly stated that it did not want federal mediators or Labor Department officials trying to negotiate a new contract.

But Biden said he was not considering tapping the Taft-Hartley Act.

“No,” Biden told reporters on Sunday. “Because it’s collective bargaining and I don’t believe in Taft-Hartley.”

CNN's Arlette Saenz contributed to this report.