(NewsNation) — With a strike deadline looming, the union for 45,000 dockworkers and the group representing East and Gulf Coast ports have exchanged wage offers, leaving a ray of hope that a deal can 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 have moved from their previous positions. The alliance said it also asked the union to extend the current contract.
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Why are Longshoremen threatening a strike?
The International Longshoremen’s Association is threatening to strike at 12:01 a.m. Tuesday, a move that could choke off activity at 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 more than $200,000 per year, but the union says they must work large amounts of overtime to reach that figure.
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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.
How could a strike affect the economy?
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 such as 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.
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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 such as 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.
What is Biden doing?
All eyes are on what, if any, action the administration might take — particularly just weeks ahead of a tight presidential election. But Biden has signaled that he will not exercise this power.
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During an exchange with reporters on Sunday, Biden said “no” when asked if he planned to intervene in the potential work stoppage.
“Because it’s collective bargaining, I don’t believe in Taft-Hartley,” he said.
NewsNation political contributor Scott Bolden said Biden is likely “keeping his fingers crossed.”
“I think behind the scenes, Biden is pushing hard on both sides and basically telling the union: ‘Don’t make me do this,'” Bolden said during an appearance on NewsNation’s “The Hill.“
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.
