The Port of New York and New Jersey is preparing for a complete work stoppage by unionized dockworkers on the East Coast and the Gulf Coast who handle nearly half of the nation’s shipping cargo — creating a possible supply chain crisis that roiled the economy after the COVID pandemic.
The International Longshoremen’s Association union, which represents 85,000 workers at 36 ports, has vowed to strike if it does not get a new deal before the current six-year contract expires on Sept. 30 at midnight.
Beth Rooney, port director of the Port Authority of New York and New Jersey, told CNBC on Thursday that the busiest port on the Eastern seaboard is beginning to wind down operations in order to avoid a pile-up of containers.
Port officials are engaged in discussions about managing cargo leading up to the anticipated work stoppage, according to Rooney.
“A number of ocean carriers have announced their plans in terms of embargoing export cargo coming to the East Coast from the Midwest,” said Rooney.
“So the further afield that the cargo might be coming to us from within the hinterland, the earlier that it would be embargoed,” she said.
Rooney said that if there is a strike and operations cease, “the vessels would either wait in a designated area or slow steam as they did during COVID to delay their arrival.”
“Once the strike is over the Coast Guard would lead the charge in an orderly flow of vessels entering the port,” she said.
As of Friday, 147 vessels — carrying an estimated $34 billion in freight — were expected to arrive by Oct. 1 at ports on the East Coast and the Gulf, according to the data and analytics company Kpler.
Of those, 38 were headed to the Port of NY/NJ.
The union is demanding significantly higher wages and a total ban on the automation of cranes, gates and container movements that are used in the loading or loading of freight at 36 US ports.
A prolonged strike would almost certainly hurt the economy. Five the nation’s 10 largest ports are either in the Gulf or the East Coast, handling between 43%-49% of all US imports.
Even a brief strike would cause disruptions. Heavier vehicular traffic would be likely at key points around the country as cargo is diverted to West Coast ports, where workers belong to a different union not involved in the strike.
Once the longshoremen’s union eventually returns to work, a ship backlog would likely result.
For every day of a port strike, experts say it takes four to six days to clear it up.
Top-scale port workers now earn a base pay of $39 an hour, or just over $81,000 a year.
But with overtime and other benefits, some can make in excess of $200,000 annually.
Neither the union nor the ports would discuss pay levels. But a 2019-2020 report by the Waterfront Commission, which oversees New York Harbor, said about a third of the longshoremen based there made $200,000 or more.
The United States Maritime Alliance, which represents the ports, has said it’s committed to resuming talks and avoiding the first national longshoremen’s strike since 1977.
It has accused the union of having already decided in advance to walk off the job.
“We need to sit down and negotiate a new agreement that avoids an unnecessary and costly strike that will be detrimental to both sides,” the alliance said in a statement.
With Post Wires
