Strike Threatened At Major U.S. Ports

Poses Significant Threat To Retailers, Importers & U.S. Economy

Strike Threatened At Major U.S. PortsNearly 15,000 dockworkers could soon go on strike at 14 major ports along the East and Gulf Coasts, posing a significant threat to retailers, importers and the U.S. economy. A strike now appears more likely after talks between the International Longshoremen's Association – which represents dockworkers – and the U.S. Maritime Alliance – which represents port management –broke off earlier this week.

If no agreement is reached, dockworkers have threatened to strike beginning at 12:01 a.m. on December 30, an action that could cost the U.S. economy an estimated $1 billion each day. Of all the ocean cargo containers coming to and from the U.S. each year, about half go through the potentially affected East and Gulf Coast ports. The New York-New Jersey ports alone handle cargo valued annually at more than $208 billion.

Fearing the consequences of a strike, the National Retail Federation has appealed to President Obama, asking him to invoke the Taft-Hartley Act and keep the dockworkers at their posts. Yet, Obama recently passed on such a move during a West Coast port strike that lasted eight days in Long Beach and Los Angeles.

At issue in the East and Gulf Coasts' dispute is the future of container royalties, which are essentially payments to unionized dockworkers based on the weight of cargo received at a port site. Port managers would like to cap or roll back the royalties, while dockworkers want to keep the current system in place. Port officials say the royalties are a competitive albatross, while union officials contend the royalties are a critical supplemental wage that managers agreed not to cap in a previous deal.

The potential strike – which would be the first East and Gulf Coast walkout since 1977 – would not affect non-container goods, but would impact items ranging from apparel to furniture to toys, as well as heavy machinery and auto parts.