Just as inflation appears to be coming down, a potential strike at the end of September could set it off again.
The International Longshoremen’s Association (ILA) union contract at East Coast and Gulf Coast ports expires at midnight on Sept. 30. The union says if there is no contract by then it will go on strike, shutting down more than a dozen U.S. ports.
While West Coast ports would not be affected by the strike, it would limit the amount of imported food, manufactured goods and raw materials coming into the U.S. That would likely make the existing imports, as well as the same things produced domestically more expensive. When demand remains the same but the supply goes down, the price inevitably goes up.
With time running out, the two sides appear to be far apart. The United States Maritime Alliance (USMX), which represents ocean shipping companies and port employers, has offered a 40% pay increase.
According to the Wall Street Journal, the union is holding out for a 77% pay increase, more than double the 32% increase recently won by West Coast dock workers.
“The ILA continues to strongly signal it has already made the decision to call a strike and we hope the ILA will reopen dialogue and share its current contract demands so we can work together on a new deal, as we have done successfully for nearly 50 years,” USMX said in a statement. “We are proud of our current offer, which includes industry-leading wage increases and retention of the existing technology language in our current agreement.”
The ILA position
ILA Harold Dagger, who last week published the YouTube video below to update union members, said “the ILA will most definitely hit the streets on Oct.1 if we don’t get the kind of contract we deserve.”
West Coast ports might be able to handle some of the cargo that normally goes through the East and Gulf Coast ports, but getting imported products from California to major distribution centers on the East Coast would add to transportation costs.
In addition to more expensive imports, U.S. exporters could be limited in their overseas shipments, possibly leading to layoffs as exports pile up.
President Biden could invoke the federal Taft-Hartley Act to force the union back to work, but it would be a move fraught with political risk coming just before the Nov. 5 election.