Port strike looms in Boston, other East and Gulf Coast ports

MIDNIGHT UPDATE: Dockworkers at ports from Maine to Texas began walking picket lines early Tuesday in a strike over wages and automation.

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NOW: The port strike has begun here in Boston.

Members of the International Longshoremen's Association are marching to the Conley Terminal to hit the picket line after failed contract negotiations with the US Maritime Alliance. This will impact ports from ME to TX. @NBC10Boston pic.twitter.com/w7l3JC9iAB

— Kirsten Glavin (@kirstenglavin) October 1, 2024

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The ILA is not answering questions, only reiterating why they’re going on strike.

Brief comment tonight from Bernie ODonnell, international Vice President for the union’s New England area. @NBC10Boston pic.twitter.com/XnibBpZWZt

— Kirsten Glavin (@kirstenglavin) October 1, 2024

With a strike deadline looming, the union for 45,000 dockworkers and the group representing East and Gulf Coast ports had exchanged wage offers, leaving a ray of hope that a deal could be reached without a major work stoppage.

In a statement, the U.S. Maritime Alliance, which represents 36 ports from Maine to Texas, said that both sides had moved from their previous positions. The alliance said it also asked the union to extend the current contract.

The International Longshoremen’s Association was threatening to strike at 12:01 a.m. Tuesday in a move that could silence ports that handle about half the ship cargo coming in and going out of the U.S.

A message was left Monday evening seeking comment from the union.

“We are hopeful that this could allow us to fully resume collective bargaining around the other outstanding issues in an effort to reach an agreement,” the alliance statement said.

The Alliance said its latest offer would increases wages by nearly 50% over the six-year contract, and triple employer contributions to retirement plans. The offer also would strengthen health care options and keep current language that limits automation.

The union has demanded 77% pay raises over six years to help deal with inflation. Many of the ILA workers can make over $200,000 per year, but the union says they must work large amounts of overtime to reach that figure.

The two sides had not held formal negotiations since June, and a strike appeared imminent. In a statement Monday morning, the union said the ports had refused its demands for a fair contract and the alliance seemed intent on a strike. The alliance has said it was willing to bargain.

A work stoppage would significantly snarl the nation's supply chain, potentially leading to higher prices and delays in goods reaching households and businesses if it drags on for weeks.

If drawn out, the strike would force businesses to pay shippers for delays and cause some goods to arrive late for peak holiday shopping season — potentially impacting delivery of anything from toys or artificial Christmas trees, to cars, coffee and fruit.

A strike could have an almost immediate impact on supplies of perishable imports like bananas, for example. The ports that could be affected by the strike handle 3.8 million metric tons of bananas each year, or 75% of the nation’s supply, according to the American Farm Bureau Federation.

Americans could also face higher prices as retailers feel the supply squeeze.

“If the strikes go ahead, they will cause enormous delays across the supply chain, a ripple effect which will no doubt roll into 2025 and cause chaos across the industry," noted Jay Dhokia, founder of supply chain management and logistics firm Pro3PL.

In South Boston, Conley Terminal could see a major impact from a strike, as it serves more than 2,500 businesses here in the northeast.

"The first thing that's going to be impacted is our fresh produce, fresh seafood. About $17 billion worth of fresh seafood comes through these ports on the East and Gulf Coast ports,” said Danny Munch with the American Farm Bureau Federation.

Experts say Boston and New York handle goods like consumer electronics and footwear -- but also a significant amount of local seafood.

According to MassPort, a strike would mean any cargo left at Conley Terminal at the end of the day Monday would be unavailable. Any refrigerated items would not be monitored or maintained.

"Those are all very perishable products. They can't just sit in a container forever. They're more likely to cause shortages in grocery stores and increases for consumers in those seafood products," Munch said.

Dhokia added that East Coast ports aren't the only ones at risk for disruption, as concern leading up to the strike has already diverted many shipments out West, adding to route congestion and more pressure on demand. Impacts will also be felt internationally — particularly in places like the United Kingdom, he said, where the U.S. is its largest trading partner.

In addition to higher wages, ILA members want a total ban on the automation of cranes, gates and container-moving trucks used in the loading or unloading of freight.

A strike by the ILA workers — set to impact ports from Maine to Texas — would be the first by the union since 1977. West Coast dockworkers belong to a different union and aren’t involved in the strike.

If a strike were deemed a danger to U.S. economic health, President Joe Biden could, under the 1947 Taft-Hartley Act, seek a court order for an 80-day cooling-off period. That would suspend the strike.

Just weeks ahead of a tight presidential election, Biden has signaled that he will not exercise this power. During an exchange with reporters on Sunday, Biden said “no” when asked if he planned to intervene in the potential work stoppage.

A White House official said that at Biden's direction, the administration has been in regular communication with the ILA and the alliance to keep the negotiations moving forward. The president directed Chief of Staff Jeff Zients and National Economic Council Director Lael Brainard to convene the alliance's board members Monday afternoon and urge them to resolve the dispute fairly and quickly — in a way that accounts for the success of shipping companies in recent years and contributions of union workers.

As for the impact, the National Retail Federation claims for every day a port is shut down, it could take anywhere from 3-5 days to recover.

“So if you have a week long strike, it could take anywhere from four to six weeks for recovery. If you go two weeks, you're looking at several months before full recovery happens,” said Jonathan Gold, of the National Retail Federation.

A strike would also come with major financial implications.

“J.P. Morgan just said they're looking at potentially five billion dollars a day hit to the economy if the ports are shut down,” Gold added.