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A labor dispute between dock workers and their employers has the potential to disrupt supply chains significantly.
The International Longshoremen’s Association (ILA), which represents 85,000 dock workers at US ports and handles nearly half of US ocean trade, announced recently that its members are ready to strike if a new contract with the United States Maritime Alliance (USMX) is not reached by September 30. The USMX represents East Coast maritime industry employers in 13 ports from Maine to Texas and stands by its most recent offer.
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Major ports on the East and Gulf Coast. Image: USMX Report 2023.
Over the summer, negotiations between the trade union and the alliance representing their employers failed to reach an agreement. The ILA firmly rejected the USMX's most recent offer, indicating a significant gap between the negotiating positions.
The union's leadership communicated a strong resolve to strike on October 1, shutting operations at 13 East Coast ports if their demands were not met. If the strike occurs, it could immediately disrupt operations at the striking ports and have far-reaching consequences for North American commercial construction extending beyond the boundaries of the striking ports.
A strike could disrupt supply chains, leading to potential material shortages. This could result in construction project delays and material price volatility, affecting the operations of businesses reliant on these materials. A strike could also interfere with domestic manufacturers that produce and export finished goods.
Shipping and logistics giant Maersk said in a statement that despite the possibility of an East Coast port strike, "we are ready to assist our customers and explore options to keep their supply chains moving best as possible via alternate routes, modalities, or distribution schedules."
USMX’s latest offer to the labor union included wage increases, raised contributions to retirement plans, higher starting wages, and the continuation of a preferred health plan. A point of disagreement between the union and workers appears to be USMX's retention of an existing technology plan that does not extend worker job protection far enough.
USMX added that they “hope the ILA will reopen dialogue and share its current contract demands so we can work together on a new deal, as we have done successfully for nearly 50 years.”
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