NEW YORK, N.Y. – Thousands of U.S. dock workers could walk off the job on Sunday, stalling 40 per cent of the nation’s containerized cargo traffic and potentially hurting retailers and manufacturers still struggling to find their footing in a weak economy.
The work stoppage by 14,000 longshoremen would immediately close cargo ports on the East Coast and the Gulf of Mexico to container ships and could cause shipments as varied as flat-screen TVs and sneakers to sit idle at sea or get rerouted at great time and expense.
The White House has weighed in on the issue, urging dockworkers and shipping companies Thursday to reach agreement “as quickly as possible” on a contract extension.
The 15 ports involved in the labour dispute move more than 100 million tons of goods each year. Losing them to a shutdown, even for a few days, could cost the economy billions of dollars.
“If the port shuts down, nothing moves in or out,” said Jonathan Gold, vice-president of supply chain and customs policy at the National Retail Federation. And when the workers do return, “it’s going to take time to clear out that backlog, and we don’t know how long that it’s going to take.”
In addition to transporting goods, U.S. factories also rely on container ships for parts and raw materials, meaning supply lines for all sorts of products could be squeezed.
“The global economy moves by water, and shutting down container ports along the East and Gulf coasts while the national economy remains fragile benefits no one,” Deborah Hadden, acting port director at Massport, the public agency that oversees shipping terminals in Boston. It is not a part of the contract dispute.
The master contract between the International Longshoremen’s Association and the U.S. Maritime Alliance, a group representing shipping lines, terminal operators and port associations, expired in September. The two sides agreed to extend it once already, for 90 days, but they have so far balked at extending it again when it expires at 12:01 a.m. Sunday.
The union said its members would agree to an extension only if the Maritime Alliance dropped a proposal to freeze the royalties workers get for every container they unload. The Alliance has argued that the longshoremen, who it said earn an average $124,138 per year in wages and benefits, are compensated well enough already.
Federal mediators have been trying to push negotiations along, but there has been no word from either side on the progress of the talks since Dec. 24. As recently as Dec. 19, the president of the longshoremen, Harold Daggett, said the talks weren’t going well and that a strike was expected.
The work stoppage would not be absolute. Longshoremen would continue to handle military cargo, mail, passenger ships, non-containerized items like automobiles and perishable commodities like fresh food.
Joseph Ahlstrom, a professor at the State University of New York’s Maritime College and a former cargo ship captain, called container ships the “lifeblood of the country.”
“We don’t fly in a lot of products. It’s just too expensive,” Ahlstrom said. “The bulk of the products we import come in inside containers.”
If it happens, the walkout could be the biggest national port disruption since 2002, when unionized dockworkers were locked out of 29 West Coast ports for 10 days because of a contract dispute.
The ports only reopened after President George W. Bush ordered an 80-day cooling-off period. Some economists estimated that each day of that lockout cost the U.S. economy $1 billion. It took months for the retail supply chain to fully recover.
An East Coast port freeze would have its biggest impact at the Port Authority of New York and New Jersey, where 3,250 longshoremen handled 32.3 million tons of cargo in 2010. The authority is not a party to the contract dispute.
Thousands of other jobs would be directly affected by the shutdown. Truck drivers might not have any cargo to transport, tug boat captains no ships to guide and freight train operators nothing to haul.
Associated Press writers Ken Thomas in Washington and Tamara Lush in Tampa, Florida, contributed to this report.