Posted on September 25, 2024
There is only one week left to resolve a major ports strike that could have a huge impact on U.S. retailers just as they come into the most important time of year.
And the odds are not looking good on preventing tens of thousands of International Longshoremen’s Association (ILA) maritime workers at ports from the top to the bottom of the country going on strike on Sept. 30.
That’s the crucial date when a six-year master contract between the ILA — the largest union of maritime workers in North America — and the United States Maritime Alliance covering East and Gulf Coast ports, is due to expire. The contract includes six of the 10 busiest U.S. ports, handling more than 13 million containers annually, among three dozen ports covered.
The ILA has consistently threatened to take strike action if a new contract is not agreed and now retailers are bracing for the shutdown just as they are in the midst of preparing for the holiday season, the most critical three-month period of the year. For some businesses, it accounts for more than half their annual sales.
Little wonder than that the CEO of the retail industry’s largest trade body, the National Retail Federation (NRF), earlier this month called for both parties to negotiate a settlement.
“The threat of a strike during the peak shipping season has many retailers already implementing costly mitigation strategies,” NRF CEO Matt Shay said. “At a time when inflation is on the downward trend, a strike or other disruption would significantly impact retailers, consumers and the economy. The administration needs to offer any and all support to get the parties back to the table to negotiate a new contract.”
The Retail Industry Leaders Association (RILA) echoed that sentiment in a statement earlier this month: “The importance of keeping these ports operational cannot be overstated, especially as the peak holiday season approaches. A disruption in cargo movements would have profound consequences for retailers, manufacturers, and consumers across the country.”
ILA Prepares For Strike
For its part, the ILA is negotiating on behalf of 45,000 dockworkers and has warned its members are prepared to down tools if they can’t agree a new contract by the Oct. 1 deadline.
In June, the NRF and a coalition of 158 state and federal trade associations called for the Biden administration to help the two parties return to the negotiating table after discussions had stalled. The NRF and a number of other trade associations have also written on a number of occasions, asking the president to ensure there is no disruption to the port operations.
Presidents have the authority to intervene in labor disputes deemed to pose a threat to national security or safety under the Taft-Hartley Act. This allows the president to impose an 80-day cooling-off period during which workers return to work while negotiations continue. However, the Biden administration has indicated that it doesn’t plan to use that authority should the longshoremen strike.
With a strike looking inevitable, retailers will be hit at their busiest time of year.
Retailers have been preparing for months, with an unusually busy summer suggesting that many retailers were trying to get ahead of the curve, while also mitigating against disruption in the supply chain around the Middle East.
They could choose to redirect imports to Canadian ports, although several of those are also facing the possibility of industrial action, or switch to air transport, which is far more expensive.
“A sleeping giant is ready to roar on Tuesday, Oct. 1, 2024, if a new Master Contract Agreement is not in place,” warned ILA President Harold Daggett in a statement. “My members have been preparing for over a year for that possibility of a strike.”
The union is arguing for improved wages and continued protections against automation and new technology in its terminals and noted that in the last three years wages have failed to keep pace with inflation.
If the workers do take action it would be the first national longshoremen’s strike since 1977.
