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10/01/2024

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US East Coast port strike scheduled for Tuesday, according to union

    September 30 – With less than five hours before a potential strike by US East and Gulf Coast dockworkers, the port management alliance announced on Monday that it has exchanged new wage proposals with the union, raising hopes of a possible agreement before container shipping halts from Maine to Texas.

    The labor contract between the International Longshoremen's Association (ILA), representing 45,000 dockworkers, and the United States Maritime Alliance (USMX), a group of port employers, is set to expire by the end of Monday. However, wage negotiations remain deadlocked.

    In a Monday statement, USMX revealed it had offered a nearly 50% wage increase and exchanged fresh proposals with the union within the last 24 hours. They also requested an extension of the current contract.

    US East Coast port strike scheduled for Tuesday

    Hopes for Progress in Negotiations

    USMX expressed optimism, stating, "We hope this can fully restore the collective bargaining process on other unresolved issues in an effort to reach an agreement."

    JP Morgan analysts estimate that a strike could cost the US economy around $5 billion per day, disrupting shipments of food, retail goods, and other products at key ports like New York, Baltimore, and Houston.

    According to the ILA, the strike is scheduled to begin at 12:01 a.m. ET on Tuesday. The union has not yet responded to requests for comment.

    Union Rejects Wage Offer

    A source familiar with the situation confirmed that USMX made a new wage offer, which the ILA rejected, calling it "an unacceptable wage package."

    If union members strike, it will mark the first coastwide ILA strike since 1977, impacting ports responsible for handling roughly half of the country's maritime shipping.

    Rick Cotton, head of the Port Authority of New York and New Jersey, stated that seaports would close by 5 p.m. ET (21:00 GMT), and nearly 100,000 containers would remain in storage at the port until the strike concludes. Additionally, 35 ships are expected to arrive at the port next week, and they will anchor during the strike.

    Calls for Presidential Intervention

    US Chamber of Commerce President Suzanne Clark has urged President Joe Biden to use his authority to halt the strike for 80 days, stating, "It would be unconscionable to allow a contract dispute to cause such a shock to our economy." However, on Sunday, Biden said he had no plans to intervene.

    On Monday, the White House reiterated that they are not considering invoking the federal Taft-Hartley Act, which would force workers back to their jobs while negotiations continue.

    A White House official stated that Chief of Staff Jeff Zients and top economic adviser Lael Brainard held a meeting with USMX board members on Monday, urging a fair and prompt resolution to the dispute.

    Minimal Impact on Military and Cruise Ship Operations

    Minimal Impact on Military and Cruise Ship Operations

    The ILA has previously announced that the strike would not affect military cargo shipments or cruise ship traffic. However, a strike could disrupt the flow of everything from food to cars at major ports, potentially jeopardizing jobs and raising inflation just weeks before the US presidential election.

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    Economic and Political Concerns

    New York Governor Kathy Hochul warned that the strike could affect items such as car imports but noted that the state does not expect an immediate impact on food or essential goods suppliers.

    "We are deeply concerned about the impact this strike could have on our supply chain, particularly for essential items like medical supplies," Hochul said.

    Jay Timmons, CEO of the National Association of Manufacturers, stated that a strike would throw the US manufacturing supply chain into chaos. "Billions of dollars' worth of goods—from food to vehicles to electronics - depend on access to East and Gulf Coast ports," he added.

    While a brief strike may have limited economic impact due to preemptive measures like increased imports or redirected shipments to West Coast ports, a prolonged strike could have severe economic consequences.

    ILA Leader Threatens Prolonged Action

    ILA leader Harold Daggett has been vocal about his readiness to shut down 36 union-controlled ports if employers like container shipping giant Maersk and APM Terminals North America don't significantly raise wages and halt terminal automation projects.

    The ongoing dispute is raising concerns among businesses that rely on maritime transport for exporting goods or securing essential imports.

    Steve Hughes, CEO of HCS International, which specializes in automotive supply and transport, criticized the ILA, saying it is "holding the entire country hostage."

    High Stakes for the US Economy and Politics

    High Stakes for the US Economy and Politics

    The ILA strike could put pro-labor US President Joe Biden in a tough position, particularly as Vice President Kamala Harris faces a close election race against former President Donald Trump.

    On Friday, Biden administration officials met with the USMX employer group, stressing the need to "come to the negotiating table in good faith, fairly and quickly" - a message they had previously conveyed to the ILA.

    USMX has accused the ILA of refusing to negotiate, further complicating efforts to resolve the dispute.

    Retailers and Supply Chain Vulnerabilities

    Retailers, responsible for roughly half of total container shipments, have been swift to bring in Halloween and Christmas goods early to avoid strike-related disruptions. Major retailers like Walmart, the largest US container shipper, and Costco have been taking every measure to minimize potential impact.

    However, many smaller shippers lack the flexibility to adapt. Ash Bhardwaj, CEO of Onx Homes, which imports materials for home construction through the Port of Miami, expressed resignation. "Everyone will face the same issues," Bhardwaj stated.3

    *This article is edited by Worldcraft Logistics, for any special requests regarding the content please contact us.

    Simon Mang

    SEO

    Digital Marketing/SEO Specialist

    Simon Mang is an SEO and Digital Marketing expert at Wordcraft Logistics. With many years of experience in the field of digital marketing, he has shaped and built strategies to effectively promote Wordcraft Logistics' online presence. With a deep understanding of the logistics industry, I have shared more than 300 specialized articles on many different topics.

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