What a looming disastrous dock strike would mean for the nation

It is growing ever more likely that tens of thousands of dockworkers in contract negotiations will soon go on strike , snarling up supply chains and costing billions of dollars just weeks before the election.

A work stoppage at major East Coast and Gulf Coast ports may begin as soon as Oct. 1 if the U.S. Maritime Alliance doesn’t reach an agreement with the International Longshoremen’s Association. The existing contract expires on Sept. 30.

The nation’s ports are throttle points for the economy, and strikes can choke off imports and exports costing hundreds of billions of dollars.

Negotiations and the possibility of a strike have big political implications so soon before voters go to polling places to vote in the presidential election that pits Vice President Kamala Harris, who hopes to rally unions behind her, against former President Donald Trump, who has growing blue-collar support and has also been pushing for union backing.

If there is a strike, President Joe Biden has the power to intervene, but the question is, will he?

The six-year contract between the International Longshoremen’s Association and the U.S. Maritime Alliance is set to expire next week. The union, which has over 45,000 members, represents workers at 36 U.S. ports that span from Maine to Texas. That includes some of the country’s biggest ports, such as the Port of Houston, the Port of New Orleans, and ports in New York and New Jersey.

The workers have made big demands. They are pushing for a major bump up in wages and trying to thwart progress toward the automation of jobs. The exact salary demands are unclear, but the Wall Street Journal, citing a person familiar with the talks, reported last month that the union is pressing for a 77% increase in wages over six years.

Union members are also pushing for a total ban on the automation of cranes, gates, and container movements at the ports. Rising wages make automation increasingly attractive to management. Thus, the two key union demands militate against each other. That union ask is in order to prevent the loss of jobs that could result in automating work at the 36 ports.

If members strike next week, it would be historic — the first strike across all of the ports in question since 1977. Statements and updates from ILA President Harold Daggett make it seem that the two sides are still far apart in their negotiations.

“My ILA members are not going to accept these insulting offers that are a joke considering the work my ILA longshore workers perform, and the billion dollar profits the companies make off the backs of their labor,” Daggett said in a statement posted this week to the union’s Facebook page.

The scale of a strike would be enormous given just how many ports and workers are involved. A work stoppage would snarl supply chains and be a logistical nightmare for companies that rely on shipments coming into the East Coast.

A strike might also have a ripple effect and be felt in ports on the West Coast given that shippers have already started to shift goods to West Coast ports precisely because of the looming specter of a massive East Coast stoppage.

Sean Higgins, a research fellow at the Competitive Enterprise Institute who is an expert in labor and employment issues, told the Washington Examiner that during the pandemic in 2021, when a lot of West Coast ports were stopped up, there was a “cascade effect” that created a supply chain crisis across the entire country.

“So it’s potentially a very significant shutdown that could really tie up the economy,” he said.

Strikes at ports also create backlogs, which take increasingly longer to resolve depending on how many days or weeks a strike drags on. An analysis by Mirko Woitzik, global director of intelligence for Everstream Analytics , found that for a three-day strike, it would take between 21 and 25 days for backlogs to be resolved. If the strike lasted a week, the backlogs wouldn’t be cleared until mid-November — after the elections.

Businesses are already bracing for the fallout and pleading with the Biden administration and both sides of the dispute to ensure negotiations continue and a strike doesn’t become a damaging reality. In a recent letter to Biden, more than 100 trade groups called for the president to intervene should negotiations fail.

“The administration needs to provide any and all support to the parties in their negotiations,” the coalition of groups said. “In addition, the administration needs to be ready to step in if a strike or other action occurs that leads to a coastwide shutdown or disruption.”

“At this critical juncture, it is imperative that the parties return to the table without engaging in disruptive activities that could harm the economy and the millions of businesses, workers and consumers who rely on the seamless flow of goods, both imports and exports, through our East Coast and Gulf Coast ports,” the letter continued.

The economic effects of a strike would be substantial and grow worse as work stoppages lengthen. Transportation analysts at J.P. Morgan estimate that a strike by longshoremen would cost the economy $5 billion per day, which is 6% of gross domestic product.

Brian Marks, executive director of the University of New Haven’s Entrepreneurship and Innovation Program, said a strike would mean ships that can’t relocate to another port to offload would sit anchored and shipping costs would rise.

“Shipping costs will be reflected in the price of goods, and then to what extent the shipper or the receiver or customers will bear that cost will be determined based on the nature of the goods and sensitivity to such goods and the pricing,” he told the Washington Examiner.

The U.S. has been fighting to drive down inflation after the worst price rises in generations after the pandemic and long into the Biden presidency. Annual inflation has fallen to 2.5%, which is still higher than the Federal Reserve’s 2% preference. Given that a lengthy strike would hit supplies, a strike would certainly have a knock-on impact on prices, stoking inflation.

“Oh yeah, I mean, look, if goods aren’t moving, if they're not getting to shelves, you’re going to have shortages, and shortages are going to cause prices to spike,” Higgins said. “That’s just the way the market works.”

The political fallout from a strike is closely related to the economic fallout.

The political question is whether Biden would intervene to prevent or end a strike. As president, he has the power to do so under the Taft-Hartley Act, which amended the National Labor Relations Act to give the executive authority to intervene in instances that represent national emergencies.

If Biden did intervene, it would impose an 80-day cooling-off period under Taft-Hartley. During that period, a strike would be averted because the longshoremen would go back to work while negotiations continued.

But, at least for right now, the White House says Biden will not pull that lever.

In a statement to the Washington Examiner, a White House official said the Biden administration is encouraging the two groups to continue negotiating toward an agreement “that benefits all sides and prevents any disruption.”

“We support collective bargaining and believe it’s the best way for American workers and employers to come to agreement,” the official said. “We’ve never invoked Taft-Hartley to break a strike and are not considering doing so now.”

Still, in 2022 there was a similar situation involving rail workers. Biden prevented a strike by convening a Presidential Emergency Board under the Railway Labor Act of 1926, and Congress used its authority to impose an agreement on the two sides.

At the time, Biden, who has branded himself the most pro-union president in history, was criticized by some pro-union figures for getting involved with a massive labor dispute involving rail workers.

Higgins said he thinks Biden’s move with the rail workers suggests there is still a possibility that the president will intervene to stop a dock strike. He said the union is also well aware of Biden’s ability to do so, a factor that plays into the brinkmanship of the negotiations.

Some lawmakers are already calling for Biden to intervene . In a letter to the president, Sen. Bill Cassidy (R-LA) called on Biden to take action before a union strike becomes a reality.

Notably, Trump has been trying to draw union support, something that historically has eluded Republicans in elections. It drew headlines this year that Teamsters President Sean O’Brien addressed the Republican National Convention .

The Teamsters also recently released internal polling of its membership, finding that 58% of members support Trump compared to 31% who back Harris. Trump’s appeal among blue-collar workers increasingly puts union members on the opposite side of the political fence from union leaders.

The Washington Examiner reached out to the Trump campaign for comment about a dock strike.

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The coming days will be crucial in determining whether the union will end up striking. Higgins noted that often such negotiations come down to the last minute and that a strike might be averted right before the contract lapses.

“Historically, these negotiations always tend to go down to the eleventh hour,” he explained. “You need that sort of pressure and tension of everything's going to stop for one side to make a concession that can lead to a deal that both sides can agree with.”