The U.S. economy dodged a bullet in October when a strike by the International Longshoremen’s Association against East Coast and Gulf Coast ports was limited to three days.
But the threat has reemerged this month, due to the way the October walkout was settled.
Union members returned to work after negotiators for the ILA and the U.S. Maritime Alliance (USMX), a group of port operators and shipping companies, agreed on the salary portion of the contract but put off resolving issues surrounding the use of automation of the ports until Jan. 15.
That deadline is coming up fast, and another walkout – a prolonged one this time – could deliver a hammer blow to the U.S. economy, affecting just about everyone.
The closure of U.S. ports from Maine to Houston would mean a sharp reduction in imported goods, everything from toys to automobiles. It would likely create shortages of many consumer goods, including food products, and drive up prices.
U.S. exports would also be affected. While West Coast ports would remain open, merchandise bound for other nations would likely pile up in U.S. warehouses, possibly leading to layoffs.
The 62% pay raise is at stake
In October, the ILA secured a 62% pay hike for union members. However, that agreement is now contingent on the two sides reaching a final contract on the remaining automation issues.
“With unresolved issues around automation and job security, the outcome of these talks could significantly impact global supply chains,” John Donigian, senior director of supply chain strategy at Moody’s, said in an interview with The Hill. “Earlier agreements delayed disruptions, but pressure is mounting for a lasting resolution.”
The potential strike would occur just five days before Former President Donald Trump is once again sworn into office. Trump has previously voiced support for the ILA but has not commented on the current negotiations.