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East Coast Port Strike Averted After Obama Intervention

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Unions and shipping companies have kicked the can down the road another month, agreeing to extend their working relationship despite contract negotiations that have snagged on container royalties.

Last week, contract negotiations between shipping companies and the union representing East and Gulf Coast dockworkers had reached enough of an impasse that the White House intervened, encouraging both parties to conclude a deal as quickly as possible.

The December 29th walkout averted by the new arrangement would’ve been the first walkout on the East and Gulf Coasts since 1977, and the Port Authority of New York and New Jersey estimates that it would cost $136 million a week in lost personal income and $110 million a week in lost economic output in the New York City metro area alone, according to information from Cowen and Company.

Industry groups concerned with the effects of a walkout have pressed Obama to help conclude the negotiations as swiftly as possible. The current contract expired at midnight on Saturday, December 29th. The National Retail Federation, American Apparel and Footwear Association, and other groups have set a meeting with Deputy Secretary of Transportation John Porcardi, and U.S. Customs and Border Protection is planning ahead to minimize delays following any future walkouts.

The United States Maritime Alliance estimates that the strike would seriously jeopardize the nascent economic recovery and threaten the financial well-being of the 14,500 International Longshoresmen’s Association members.

In the event of a strike, the ILA will stop handling containerized cargo but will continue to handle perishables, mail, non-containerized cargo, passenger ships, autos, and military cargo.


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