Dockworkers on U.S. East Coast strike, halting half the nation's ocean shipping

Dockworkers on the U.S. East Coast and Gulf Coast began a strike early on Tuesday, their first large-scale stoppage in nearly 50 years, halting the flow of about half the nation's ocean shipping after negotiations for a new labour contract broke down over wages.

The strike blocks everything from food to automobile shipments across dozens of ports from Maine to Texas, in a disruption analysts warned will cost the economy billions of dollars a day, threaten jobs and stoke inflation.

The International Longshoremen's Association (ILA) union representing 45,000 port workers had been negotiating with the United States Maritime Alliance (USMX) employer group for a new six-year contract ahead of a midnight Sept. 30 deadline.

The ILA said in a statement on Tuesday it shut down all ports from Maine to Texas at 12:01 a.m. ET and had rejected USMX's final proposal made on Monday, adding the offer fell "far short of the demands of its members to ratify a new contract."

The ILA's fiery leader, Harold Daggett, has said employers like container ship operator Maersk and its APM Terminals North America have not offered appropriate pay increases or agreed to demands to stop port automation projects. The USMX said in a statement on Monday it had offered to hike wages by nearly 50 per cent, up from a prior proposal.

"We are prepared to fight as long as necessary, to stay out on strike for whatever period of time it takes, to get the wages and protections against automation our ILA members deserve," Daggett said Tuesday. "USMX owns this strike now. They now must meet our demands for this strike to end."

USMX did not immediately respond to requests for comment.

The strike, the ILA's first since 1977, is worrying businesses across the economy that rely on ocean shipping to export their wares or secure crucial imports. The strike affects 36 ports that handle a range of goods from bananas to clothing to cars.

There are nearly 100,000 containers in New York City-area ports alone waiting to be unloaded, now frozen by the strike, and 35 container ships headed to New York over the coming week, said Rick Cotton, executive director of the Port Authority of New York and New Jersey.

The union is "holding the entire country over a barrel," said Steve Hughes, CEO of HCS International, which specializes in automotive sourcing and shipping. "I'm really afraid that it is going to be ugly."

Biden says federal government won't intervene

U.S. President Joe Biden and Vice-President Kamala Harris are closely monitoring the strike and expect its impact on consumers to be limited, the White House said Tuesday.

"The president has directed his team to convey his message directly to both sides that they need to be at the table and negotiating in good faith — fairly and quickly," the White House said in a statement.

The president has also directed his Supply Chain Disruptions Task Force to meet every day and prepare to address potential disruptions, the statement said.

Biden administration officials had met with both USMX and ILA ahead of the strike to encourage a deal. But Biden's administration has repeatedly ruled out the use of federal powers to break a strike in the event of an impasse.

U.S. Chamber of Commerce president Suzanne Clark urged Biden on Monday to reconsider, saying it "would be unconscionable to allow a contract dispute to inflict such a shock to our economy."

Backup plans

Retailers accounting for about half of all container shipping volume have been busily implementing backup plans as they head into their all-important winter holiday sale season.

Many of the big players rushed in Halloween and Christmas merchandise early to avoid any strike-related disruptions, incurring extra costs to ship and store those goods.

Retail behemoth Walmart, the largest U.S. container shipper, and membership warehouse club operator Costco say they are doing everything they can to mitigate any impact.

New York Governor Kathy Hochul said on Monday the state expects no immediate impact on food suppliers or essential goods.