US East Coast Port Strike Expected Tuesday with No Talks Planned, Reports Reuters

By Lisa Baertlein, Timothy Aeppel, and David Shepardson

U.S. port workers on the East and Gulf Coasts are poised to begin a strike at midnight on Monday, with no negotiations currently scheduled to prevent a stoppage that could disrupt container traffic from Maine to Texas and potentially cost the economy up to $5 billion each day.

The labor contract between the International Longshoremen’s Association (ILA), which represents 45,000 port workers, and the United States Maritime Alliance (USMX) employer group, is set to expire late Monday. Negotiations have stalled largely due to disagreements over wages.

The ILA announced on Sunday that the strike will commence at 12:01 a.m. Eastern Time on Tuesday. They criticized the USMX for "refusing to address a half-century of wage subjugation."

If the walk-off occurs, it would mark the first coast-wide ILA strike since 1977, impacting ports that handle roughly half of the nation’s ocean shipping.

No negotiations are currently happening, and none are scheduled before the looming deadline, according to a source familiar with the situation, who requested anonymity due to the sensitive nature of the matter.

The union has indicated that military cargo shipments and cruise ship traffic will not be affected by a potential strike. However, the work stoppage could halt the transportation of essential goods, from food to automobiles, at major ports, jeopardizing jobs and potentially fueling inflation just weeks before the U.S. presidential election.

The Business Roundtable, representing significant U.S. business leaders, expressed deep concern over the potential strike at East Coast and Gulf Coast ports. The organization warned that such a stoppage could inflict billions of dollars in economic losses daily, affecting businesses, workers, and consumers nationwide. They called on both parties to reach an agreement ahead of Monday night’s deadline.

While a brief strike might result in minimal economic fallout—because many companies have stocked up on goods or shifted more shipments to West Coast ports—a prolonged stoppage could lead to severe economic repercussions.

Harold Daggett, the ILA’s assertive leader, emphasized the stakes by stating in a recent video, "I’ll cripple you. I will cripple you." He has consistently warned that his union would shut down the 36 ports under its jurisdiction if employers, such as container ship operator Maersk and APM Terminals North America, do not offer substantial wage increases and halt automation projects at terminals.

The ongoing dispute is raising alarms among businesses that depend on maritime trade for exporting goods or securing essential imports. Steve Hughes, CEO of HCS International, criticized the ILA for "holding the entire country over a barrel."

An ILA strike could put President Joe Biden in a difficult position, particularly as Vice President Kamala Harris is engaged in a closely contested election against former President Donald Trump. Biden stated on Sunday that he did not plan to intervene to prevent a walkout if dock workers could not secure a new contract.

Under the federal Taft-Hartley Act, U.S. presidents can intervene in labor disputes impacting national security or safety by instituting an 80-day cooling-off period, compelling workers back to work while negotiations continue. On Friday, Biden administration officials met with the USMX to stress the importance of fair and expedient negotiations.

The USMX has accused the ILA of being unwilling to negotiate.

With retailers responsible for about half of all container shipping volume gearing up for the crucial winter holiday sales season, many are implementing contingency plans. Jefferies analysts noted that a strike could lead to significant declines in consumer stocks.

Many large retail operators, such as Walmart and Costco, have taken proactive measures, bringing in Halloween and Christmas merchandise ahead of schedule to avoid disruptions caused by a strike, even if it meant incurring extra shipping and storage costs.

However, smaller shippers, who rely heavily on East and Gulf Coast imports, may lack the resources to stockpile goods.

Ash Bhardwaj, CEO of Onx Homes, whose factories in Florida depend on materials imported through the Port of Miami, expressed a sense of resignation about the potential strike. "Everyone will have the same problem," he said, acknowledging the widespread impact it could have.