Understanding potential dockworkers' strike and its effect on New York

Time is running short for employers to strike a deal with thousands of dockworkers in New York, New Jersey and dozens of other ports who have otherwise threatened to walk off the job, halting the shipment of goods.

The International Longshoremen’s Association is preparing to strike Tuesday with 45,000 members that could potentially shut down 36 seaports from Maine to Texas. Only an agreement with their employers, represented by the United States Maritime Alliance, will prevent a work stoppage, according to union leaders. And stalled negotiations mean that with each passing day, the likelihood of a strike increases.

The Port of New York and New Jersey, the third-busiest in the nation, has been preparing with a work stoppage plan. Beth Rooney, the port director at the Port Authority of New York and New Jersey, issued a letter this past Monday to customers and partners calling for all cargo to be picked up by Monday, before the ports would become unmanned at midnight.

A strike that lasts beyond several days could have devastating repercussions, transportation experts said.

Why is there talk of a strike at the East Coast and Gulf Coast ports?

The International Longshoremen’s Association, the dockworkers' union, has been unable to reach a master contract agreement with the United States Maritime Alliance, also known as USMX and comprised of companies that handle cargo shipped in and out of United States ports. The contract expires Monday. The union is seeking protections against the use of automation, which they believe will strip away jobs. They also are requesting an increase in wages to keep up with inflation. USMX previously said it would maintain current language in the contract stating there will be no automation without both parties agreeing to staffing levels and workforce protections.

In a Monday news release, USMX said the union has refused to return to the bargaining table.

"We remain prepared to bargain at any time, but both sides must come to the table if we are going to reach a deal," the release from the alliance said. That same day, the union fired back in its own release that the two sides have communicated, but discussions have stalled because the alliance has offered "a lowball wage package."

What are the immediate ramifications of a work stoppage?

A strike would shut down operations at 36 seaports across the East and Gulf coasts. As an example of how vital those container ports are, in 2020, they handled nearly 53% of all imports nationwide, according to Jean-Paul Rodrigue, Maritime Business Administration professor at Texas A&M University-Galveston.

Locally, the Port of New York and New Jersey is a major artery for all sorts of goods, from furniture to retail to auto parts. The port moves about $240 billion in goods each year, or roughly $920 million per workday, according to the Port Authority.

Transportation experts said that cargo will continue to flow into the area from other modes, like trucking, rail or air, but with each day the ports remain closed, delays will accrue. For every one day of a strike, it could take five to six days to catch up, experts have said.

Many larger companies have contingency plans in place and have stockpiled supplies ahead of the holiday season or have alternative shipping plans in place. But there are concerns that smaller companies might face more difficulties because they don’t have the money to buy ahead or to cover extra travel costs, such as that associated with air cargo.

Zach Miller, director of metro region operations for the Trucking Association of New York, based in upstate Clifton Park, said the industry is bracing for delays.

"If we see a prolonged work stoppage, we do anticipate seeing some real struggle by the sort of small amount of carriers," Miller said. "There would probably be some delays in cargo arriving in New York."

What happens if a strike lasts longer than a few days?

The backlog will have a ripple effect along the supply chain.

Experts expect minimal consequence to the consumer for the first several days of a strike, but the larger economic impact would be costly. A continued strike eventually could lead to shortages of some products and higher prices as demand outweighs supply.

"With scarcity of product in a short period of time, consumers now will be challenged with higher prices because they'll ... pay more money for those items," said global business and transportation Professor Chris Petrocelli at SUNY Maritime College in the Bronx. 

Perishable food items that are carried in refrigerated containers are a top concern, according to transportation experts.

"Within a matter of a few days, you're going to start to get serious disruptions. In the refrigerator container business, it's going to come very, very quickly," added Rodrigue, who also taught at Hofstra University until 2023.

How long could a potential stoppage last?

Some transportation experts do not see the strike lasting more than a few days due to the potentially devastating effects of a longer shutdown and are confident the federal government will intervene. Others are concerned any government intervention will become politicized. 

How can the federal government step in?

Under the 1947 Taft-Hartley Act, the president can intervene and request that both parties go back to the drawing board.

"Things will go south very quickly, and then you're going to get an immediate intervention from the federal government. At this point, the federal government is a wait and see," Rodrigue said.

Will supply of any products be impacted?

It’s hard to predict the inventory that will be effected, but there are looming concerns across a wide range of industries. Jonathan Gold, vice president of Supply Chain & Customs Policy at the National Retail Federation, said, "If the ports are shut down, that means we can't bring products into the country. And the challenge is that this is the most important time for the retail industry," Gold said, adding it is peak shipping season. In a recent letter to President Joe Biden, the federation, along with 177 trade groups, called on the administration to step in if a strike occurs.