Thousands of dock workers in every major Eastern and Gulf Coast ports They are set to strike early next week, threatening to shut down trade gateways that handle about half of all containerized goods in and out of the US.
Negotiations between the union representing dock workers and the shipping industry group representing terminal operators and ocean carriers have been stalled for months, with both sides this week issuing conflicting statements about their willingness to negotiate.
The United States Maritime Alliance (USMX) has filed an unfair labor practice complaint with the National Labor Relations Board, seeking “immediate injunctive relief — the union must renegotiate — so we can negotiate a contract,” the alliance said Thursday.
The NLRB confirmed receiving the unfair labor practice charge, which is filed by its regional office in Newark, New Jersey. The charge will appear on the agency’s website in the next few days, after which an investigation will begin.
USMX’s appeal to the NLRB was derided as “another publicity stunt” by the International Longshoremen’s Association (ILA). “Foreign companies represented by USMX set up shop in US ports, earn billions of dollars in revenue and profits and take those profits out of the country, and ILA fails to adequately compensate longshore workers for their labor. An unfair labor practice,” the union said. Report Published on Thursday.
Top Biden administration officials, including Transportation Secretary Pete Buttigieg, Acting Labor Secretary Julie Sue and National Economic Council Director Lael Brainard, met with USMX members on Friday to urge negotiations before the deal closes.
experts That’s a shutdown It can severely hamper the flow of goods and raise shipping costs. As U.S. inflation normalizes, any increase in such spending could be passed on to consumers and deter the Federal Reserve when it finally centralizes. Lowering interest rates.
Here’s what to know about the labor strike, the first mass strike in eastern ports in nearly half a century.
What are the main issues in labor disputes?
The dispute involves tens of thousands of workers threatening to strike at ports from Massachusetts to Texas unless a new labor agreement is reached with USMX before the current contract expires at midnight on September 30. Strike since 1977.
According to USMX, a total of 14 ports involving 25,000 workers could be affected by the strike: Baltimore; Boston; Charleston, South Carolina; Jacksonville, Florida; Miami; Houston; Mobile, Alabama; New Orleans; New York/New Jersey; Norfolk, Virginia; Philadelphia; Savannah, Georgia; Tampa, Florida; and Wilmington, Delaware.
But as economic activity at ports touches a range of businesses such as warehousing and transportation, economists say the fallout could put more than 100,000 workers temporarily out of work.
Union workers at ports on the East Coast and Gulf Coast earn a base wage of $39 an hour after six years on the job. That’s significantly less than their unionized West Coast counterparts, who earn $54.85 an hour — which will increase to $60.85 in 2027, excluding overtime and benefits.
Assuming a 40-hour work week, West Coast port workers earn more than $116,000 a year, compared to $81,000 for their counterparts in the East. The ILA’s initial demands included a 77% wage increase over a six-year contract, with the labor group arguing that the increased wages would offset the rise in U.S. inflation in recent years.
In August USMX offered what it called an “industry-leading” wage increase, but the sides are far apart.
“Mark my words, we’re going to shut them down on October 1st if we don’t get the wages we deserve,” ILA President Harold Daggett said earlier this month.
However, the differences are not only in wages. To protect job security, the ILA calls for a complete ban on automation of cranes, gates and container movements used when loading or unloading cargo.
The Maritime Alliance said it proposed to maintain provisions in the current contract banning fully automated terminals while banning the use of semi-automated equipment in the new labor agreement.
Unable to bridge the gap, the ILA suspended negotiations with the USMX in June. to say The ILA’s use of automatic gates to allow trucks to enter ports without labor violated its existing labor agreement.
What impact will the strike have?
Ports that could be closed in a strike handle more than 68% of all containerized shipments in the U.S. and roughly 56% of containerized imports, according to industry data. So even a short strike can cause significant disruptions in regional trade flows.
According to Oxford Economics analysts, a strike could reduce US economic activity by $4.5 billion to $7.5 billion. The investment research firm estimates that it will take up to a month to clear the backlog of shipments that accumulate while ports are closed.
While West Coast terminals can absorb some cargo from Eastern ports, they can’t handle it all, nor can the U.S. rail system, experts say.
If the strike lasts for more than a month, some companies may face shortage of spare parts and other inputs. Most of the raw materials that go into a range of products go through Eastern and Gulf Coast ports, such as cotton, lumber, and copper. The automotive and pharmaceutical industries, which maintain lean inventories, could be hit, while port closures in Miami and Norfolk could hurt tobacco companies.
In addition, the strike will disrupt exports of commodities such as bananas, manufacturing components and plywood, disrupting the flow of consumer goods and industrial components for industries. Fresh meat and other refrigerated foods can spoil, resulting in shortages and higher prices.
“I think everyone is a little nervous about it,” said Mia Ginter, director of North American ocean shipping for logistics company CH Robinson. “The rhetoric with the ILA this time is at a level we have never seen before.”
The labor dispute comes at a time when the Federal Reserve is closely monitoring signs of a weakening labor market.
“In principle, the Fed should see any temporary weakness, but it can be difficult to separate the noise from the signal. So, a strike would increase the odds of another 50 basis point cut in November,” Grace Schwemmer, associate US economist at Oxford Economics, wrote in a Thursday research note.
How are companies preparing?
In contrast, consumers may not notice a shortage of store merchandise during the holiday shopping season because most products are stored in warehouses after being transported beforehand.
Jonathan Chappell, senior managing director of transportation at Evercore ISI, an investment research firm, said the strike doesn’t mean “Santa isn’t coming.”
According to Ben Nolan, transportation analyst at investment bank Stifel, imports to U.S. ports are up 10% from last year.
“Many retailers have already taken steps to minimize the potential impact of the strike by bringing in products or moving products to the West Coast,” said Jonathan Gold, vice president of supply chain and customs policy at the National Retail Federation.
However, given the complexity and interconnectedness of global supply chains, “even a small disruption can have a negative impact and cause delays at a critical time for both retailers and consumers,” he added.
The ILA said Wednesday that its members would continue to handle all military cargo in the event of a strike and would continue to work on passenger ships to avoid inconvenience to the “tens of thousands of Americans who have booked trips in advance.”
Will there be a political solution?
If the strike is considered a threat to national health or safety, under Taft-Hartley Act President Joe Biden may seek a court order for an 80-day cooling-off period.
A Biden administration official told CBS News that the U.S. Department of Labor is monitoring the situation and is in contact with the parties, but there are no current plans to engage in negotiations.
“We have never called on Taft-Hartley to call a strike, and we are not considering doing so now,” the White House told CBS News.
By contrast, the Biden administration has intervened to resolve labor disputes that have plagued it in recent years.
In 2022, Mr. As Biden and Congress moved to block the railroad strike, the president signed legislation crafted by lawmakers to impose a temporary contract on dozens of unions representing 115,000 workers. In 2023, Acting Secretary of Labor Julie Su was instrumental in brokering an agreement to avoid a strike and brokering a new labor contract for West Coast dockworkers.
Union influence remains strong ahead of the presidential election, as candidates compete for labor votes and views of clogged ports and product shortages during the pandemic are still on voters’ minds.
“If ever there was a time when labor could get them what they want,” said Stifel’s Nolan, “it’s now.”
Some observers think that, when push comes to shove, Mr. Biden will act to prevent a walkout.
The U.S. government is unlikely to intervene as quickly as Canada did in the labor crisis that shut down the country’s rail service last month. The Canadian government has ordered Schwemmer noted at the Oxford Economics Institute
“However, if the strike lasts several weeks, the odds of government intervention in the negotiations will increase, especially as the presidential election is fast approaching,” the economist said.
“A potential strike at Eastern and Gulf Coast ports is unlikely to trigger any major economic disruption because it’s so close to the election and, despite early denials, President Biden has no choice but to back down. Legislation to work,” the Capital Economics analysts wrote.
And
contributed to this report.
