As NJ port union strike looms that could disrupt holiday shopping, no new contract talks

Posted by Admin September 18, 2024 Shopping

3-minute read

Black Friday — the unofficial start of the holiday shopping season — is about two months away.

And that’s if you don’t count all the holiday shopping that gets done between Halloween and Thanksgiving weekend.

So the timing couldn’t be worse for a potential strike by the International Longshoremen’s Association, the union that represents dock workers, which has threatened to walk off the job if a new contract with the East Coast port terminal and shipping companies is not ironed out by the time the old contract expires on Sept. 30.

The ILA cut off negotiations in June, and in an update Tuesday, the Lyndhurst-based U.S. Maritime Alliance, or USMX — which represents the terminal operators and shipping lines — said there was no progress on negotiations for a master contract.

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A strike by the ILA would effectively shut down some of the busiest ports across the nation, including the Port Authority of New York and New Jersey, potentially upending the delivery of billions of dollars worth of consumer goods during peak shipping season.

The ILA, based in North Bergen, represents 85,000 workers across the East and Gulf coasts.

Its leaders are seeking significant pay hikes for their members, saying they deserve a fair share of the profits that shopping and port terminal companies have made as cargo volume remains higher after the demand caused during the COVID-19 pandemic.

More: NJ ports have been slow to modernize. Will they take the leap to control costs?

The union cut off contract talks in June after learning that a form of automation had been introduced at the Port of Mobile in Alabama, which they said violated the existing contract. The port had started using an auto gate system that autonomously processes trucks without ILA labor, the union said.

“We have tremendous respect for the ILA and its members, but it is disappointing that we have reached this point where the ILA is unwilling to reopen dialogue unless all of its demands are met,” the USMX said in a statement Tuesday.

Earlier in the month, USMX said it “has still been unable to secure a meeting with the ILA to resume negotiations on a new master contract.”

Representatives for the longshoremen’s association could not be reached for comment on Tuesday.

Strike could mean weeks of supply chain delays

A strike could impact key ports on the East and Gulf coasts, from Maine to Houston, and it would cause a complete work stoppage at the Port of Newark and Elizabeth. The Port Authority of New York and New Jersey acts as the landlord at those ports, leasing out space to the terminal companies.

Peter Tirschwell, vice president for maritime and trade at S&P Global, said that a strike of a few days could mean weeks of supply chain delays, while a strike lasting a week or longer would mean delays of over a month.

“A longer walkout than that will begin to seriously impact holiday shipments,” he said in an email.

Maersk — the world’s second largest shipping container company — said in a Sept. 10 note to customers that “even a one-week shutdown could take four to six weeks to recover from, with significant backlogs and delays compounding with each passing day.”

Retails have pushed forward importing schedule

“Many importers — retailers and other companies — have been aware for months of the possibility of a strike, and have therefore pushed forward their importing schedule so that a lot of holiday goods are already in the country and safe from a strike,” Tirschwell of S&P added.

Shipping to ports on the West Coast has surged — for example by 41% year over year this June at the Long Beach port, a port press release said, as companies seek backup locations to which they could ship.

“We are recapturing market share and consumer spending is driving cargo to our docks as we head into the peak shipping season,” Port of Long Beach CEO Mario Cordero said in a statement. Meanwhile shipping surged over the summer, according to the Port Authority of NY and NJ.

But that process of rerouting ultimately adds to the cost of shopping, meaning more expensive goods on the shelf, said Richard Wohlrab, vice president of international logistics at Mariner Logistics.

Jonathan Gold, the National Retail Federation’s vice president of supply chain, called on the ILA and USMX to “return to the table and actually negotiate a new deal.”

A strike would mean “holiday shipments might not arrive on time” for retailers, Gold said last week.

“Manufacturers might not receive parts, materials, and supplies needed for production, which will lead to assembly lines shutting down,” Gold said.

“And farmers won’t be able to get their products to overseas markets, which could lead to lost sales,” he said.

Daniel Munoz covers business, consumer affairs, labor and the economy for NorthJersey.com and The Record.

Email: munozd@northjersey.com; Twitter:@danielmunoz100 and Facebook