by Manal Barakat, SeaNewsEditor

This week, the United States Maritime Alliance (USMX) and the International Longshoremen’s Association (ILA) issued two contradictory statements.

On the one hand, the USMX claims it has been “unable to schedule a meeting” to continue talks on a new Master Contract, saying that “there is no indication that the ILA is interested in negotiating at this time.”

On the other hand, the ILA claims that “the two sides have communicated multiple times in recent weeks” and blamed the association for the deadlock.

“The stalemate remains in Master Contract negotiations because USMX continues to offer ILA longshore workers an unacceptable wage increase package,” says the ILA statement.

While the two parties engage in the blame-shifting game, exporters, retailers, and politicians' concerns are at an all-time high one week before the potential strike.

Food exporters and retailers “worried”

If a strike occurs, and depending on the length of the strike, agricultural exporters could be severely affected as they rely heavily on East and Gulf Coast ports.

While there are alternative routes, they come with constraints like limited rail capacity and higher shipping costs.

“The east and Gulf coast ports are absolutely critical,” said the Agriculture Transportation Coalition executive director Peter Friedmann in a talk with Lloyd's List.

About 25% of US agricultural exports by volume and 55% by value are containerised shipments. In 2023, ports on the East and Gulf coasts handled nearly half (46%) of US containerised agricultural exports.

Unlike importers, agricultural exporters can’t easily adjust their schedules or pass on extra costs to consumers.

And while importers may charge customers more for freight in the event of a strike, agribusiness exporters lack this flexibility. Exporters could lose sales if they increase their pricing or miss their delivery window.

Retailers, in the meantime, are concerned about significant disruptions in supply chain and holiday operations. 

Speaking to Lloyd’s List, Jonathan Gold, vice president of supply chain and customs policy for the National Retail Federation (NRF), said that NFR members have accelerated imports in 2024 to mitigate the impact.

“The biggest issue is that our members were planning for a potential strike impacting east and Gulf coast ports. Because of the timing, it would significantly impact holiday operations,” says Gold.

However, if the ILA goes on strike, retailers and other US businesses will still face challenges, even with the early shipments.

“As much as folks have either pulled forward or shifted to the West Coast, you can’t do that for everything that needs to come in. Businesses are still going to be impacted by a shutdown, and the longer it goes on, the more of an impact there will be,” adds Gold.

US lawmakers call for intervention

A group of 69 Republican lawmakers have urged President Biden to use all available authority to prevent the strike and ensure the continuous flow of goods.

In a letter sent last week, Representatives Sam Graves of Missouri and Daniel Webster of Florida said, “If a strike should occur, we urge the administration to utilise every authority at its disposal to ensure the continuing flow of goods and avoid undue harm to American consumers and the nation’s economy.”

According to Lloyd’s List, the Republicans' letter suggested that the White House should apply the Taft-Hartley Act without explicitly requesting it.

Taft-Hartley Act

The Taft-Hartley Act, known as the Labour Management Relations Act of 1947, is a US federal law restricting labour unions' activities and power.

The act includes a provision that allows the President of the United States to intervene in strikes that pose a national emergency.

Bloomberg Law describes that, through this act, the President can seek an order from a federal court to stop the strike for an 80-day “cooling-off” period, during which a board of inquiry investigates the dispute and reports back to the President.

The President can recommend further action to Congress if the dispute is unresolved within that time.

President George W. Bush is said to have used this mechanism in 2002 to end a lockout of West Coast dock workers.

Despite the proximity of the strike’s potential date, it remains unclear how things will unfold next week. That said, experts believe that strikes at this stage are highly likely.