On Thursday, President Joe Biden said he believes progress was being made in a port labor contract dispute as dockworkers entered the third strike day along the Gulf and East Coasts.
The strike, the largest of its kind in almost a half-century, has blocked the unloading of container ships from Texas to Maine, threatening shortages of everything from machinery to bananas and triggering a backlog of ships anchored outside critical ports.
There were no negotiations between employers and the International Longshoreman’s Association (ILA). Still, under White House pressure to increase their pay offer, port owners signaled on Wednesday that they were willing to open new talks.
“I think we’re making progress,” said Biden to reporters Thursday without providing further details. “We’ll find out soon.”
By Wednesday, at least 45 container vessels were unable to unload, an increase from three before the strike started Sunday, according to Everstream Analytics,
“Many seem to have decided to wait it out, possibly in hopes of a prompt resolution to the strike action, rather than taking the proactive decision to divert,” said Everstream’s Jena Santoro in a video presentation.
Santoro said the backlog of vessels could double by week’s end if the stoppage continues, and the resulting congestion will take weeks—if not months—to clear.
On Tuesday, the ILA launched the strike of 45,000 port workers from Texas to Maine, its first significant work stoppage since 1977, following the breakdown of talks for a new six-year contract with the United States Maritime Alliance (USMX).
The ILS is seeking a significant pay raise along with commitments to stop port automation projects it fears will kill jobs. The USMX offered the workers a 50% pay raise. However, the ILA said that more was needed to address its concerns.
“Reaching an agreement will require negotiating,” said the USMX late Wednesday. “We cannot agree to preconditions to return to bargaining, but we remain committed to bargaining in good faith to address the ILA’s demands and USMX’s concerns.”
The Biden-Harris administration has sided with the union, piling the pressure on port employers to raise their offer to secure a deal and citing the shipping industry’s massive profits since the Covid-19 pandemic.
Administration has resisted calls from business groups GOP to halt the strike
However, it has repeatedly resisted calls from GOP lawmakers and business trade groups to use federal power to stop the strike. This move would undermine support from Democrats among the unions prior to the November 5 presidential election.
“The president needs to take a more aggressive stance here,” said Republican Senator Shelley Moore Capito of West Virginia.
On Wednesday, the National Retail Federation, along with 272 other trade associations, also called on the administration to use its federal authority to halt the strike and said the walkout has the potential for “devastating consequences.”
The strike affects 36 points—including Houston, New York, and Baltimore—that handle a wide range of containerized goods.
Economists from Morgan Stanley say port closures won’t raise consumer prices initially as companies have accelerated shipments for key goods in recent months. But a lengthy stoppage will eventually filter down, with food prices likely to react first, according to economists.
“After the first week, we can expect some impact on perishable products like bananas, other fruits, seafood, and coffee, meaning fewer goods are reaching consumers, potentially driving up prices,” said global practice director for security and resilience at BSI Americas, Tony Pelli.
