U.S. East Coast port union strike threat to test shippers' nerves

Descartes Systems group

13/06/2024 01:08

June 12 (Reuters) - - Labor talks at U.S. ports on the
East Coast and Gulf of Mexico are a looming risk for retailers,
manufacturers and other shippers already grappling with longer
transit times and higher costs. 
    The International Longshoremen's Association contract
covering 45,000 dockworkers at three dozen ports stretching from
Maine to Texas expires on Sept. 30. If there is no deal by then,
the union could call a strike that would hit during the vital
holiday container shipping season and labor-friendly U.S.
President Joe Biden's bid for reelection.
    The ILA on Monday called off this week's planned start of 
talks with the U.S. Maritime Alliance, citing one member of that
employer group's use of automation technology in violation of
prior agreements.
    ILA President Harold Daggett previously warned that members
would strike if a deal is not reached before the current
contract lapses. He has alerted locals at vital trade hubs like
New York/New Jersey and Houston to be ready to strike on Oct. 1,
the union said.
    Seaport labor strikes are rare in the United States, but
noise and anxiety during contract talks runs high. That's
because any work slowdown or stoppage would affect billions of
dollars of products ranging from food and medicine to furniture
and factory equipment.  
        Port of Los Angeles Executive Director Gene Seroka on
Wednesday said this week's ILA developments were not unusual. 
    "During these negotiations, there are stops and starts,"
Seroka said.
    Ports on the East Coast and Gulf of Mexico had a slight
market share edge over rival West Coast ports in May. That's
when Vincent Golebiowski, global head of supply chain for Coach
and Kate Spade handbag seller Tapestry  TPR.N , told Reuters he
was more focused on making sure he wasn't losing transit time
rerouting shipments away from the Suez Canal due to Houthi
militant attacks in the Red Sea.
    This week's strike warning from the ILA is certain to test
the nerves of shippers like Golebiowski. 
    Seroka on Wednesday said some importers have shifted
"fractional amounts" of cargo from East and Gulf Coast ports to
Los Angeles as a hedge against the U.S. contract talks, Red Sea
disruptions and Panama Canal passage restrictions.      
    Los Angeles and other West Coast ports lost market share in
the lead-up to the International Longshore and Warehouse Union's
contract deal in June last year. That agreement capped 13 months
of start-and-stop talks.       
    "There was a lot of saber-rattling, but goods moved," said
Chris Jones, an executive vice president at trade data provider
Descartes Systems Group  DSG.TO .  

 (Reporting by Lisa Baertlein in Los Angeles; Editing by Leslie
Adler)
 ((lisa.baertlein@thomsonreuters.com; +1 310-491-7241; Reuters
Messaging: lisa.baertlein.thomsonreuters.com@reuters.net))