By Doyinsola Oladipo
NEW YORK (Reuters) – Dockworkers along the U.S. East Coast and Gulf Coast began a strike on Tuesday, halting the flow of about half the nation’s ocean shipping after negotiations for a new labor contract broke down over wages.
The strike blocks everything from food to automobile shipments across dozens of ports from Maine to Texas, in a disruption analysts warned will cost the economy billions of dollars a day, threaten jobs, and stoke inflation.
The International Longshoremen’s Association (ILA) union representing 45,000 port workers had been negotiating with the United States Maritime Alliance (USMX) employer group for a new six-year contract ahead of a midnight Sept. 30 deadline.
“As a result of the expiration of the master agreement between United States Maritime Alliance (USMX) and the International Longshoremen’s Association (ILA), there is a work stoppage at The Port of Virginia and other ports along the U.S. East and Gulf coasts,” the Virginia port authority said, announcing the stoppage.
The USMX and union did not immediately respond to requests for comment.
But the ILA’s fiery leader, Harold Daggett, said earlier employers like container ship operator Maersk and its APM Terminals North America had not offered appropriate wage increases or agreed to demands to stop port automation projects. The USMX said in a statement on Monday it had offered to hike wages by nearly 50%.
The ILA said in statements on Sunday and Monday that a port strike would go ahead, starting on Tuesday at 12:01 a.m. ET.
The strike, the ILA’s first since 1977, is worrying businesses across the economy that rely on ocean shipping to export their wares or secure crucial imports. The strike affects 36 ports that handle a range of containerized goods from bananas to clothing to cars.
The union is “holding the entire country over a barrel,” said Steve Hughes, CEO of HCS International, which specializes in automotive sourcing and shipping. “I’m really afraid that it is going to be ugly.”
The dispute is also wedging labor-friendly U.S. President Joe Biden into a virtual no-win position as Vice President Kamala Harris runs a razor-tight election race against Republican former President Donald Trump.
Biden administration officials had met with both USMX and ILA ahead of the strike to encourage a deal. But Biden’s administration has repeatedly ruled out the use of federal powers to break a strike in the event of an impasse.
U.S. Chamber of Commerce President Suzanne Clark urged Biden on Monday to reconsider, saying it “would be unconscionable to allow a contract dispute to inflict such a shock to our economy.”
Retailers accounting for about half of all container shipping volume have been busily implementing backup plans as they head into their all-important winter holiday sales season.
Many of the big players rushed in Halloween and Christmas merchandise early to avoid any strike-related disruptions, incurring extra costs to ship and store those goods.
Retail behemoth Walmart (NYSE:), the largest U.S. container shipper, and membership warehouse club operator Costco (NASDAQ:) say they are doing everything they can to mitigate any impact.
New York Governor Kathy Hochul said on Monday the state expects no immediate impact on food suppliers or essential goods.
