Philadelphia’s port workers and thousands of others on the East and Gulf coasts could strike as soon as October, a move that is already beginning to muck up the nation’s supply chain.
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The union for dockworkers said talks to renew a contract for its members with the group representing employers have hit a deadlock, Axios reported.
The International Longshoremen’s Association is the largest maritime union in North America, with some 85,000 members. Its contract with the U.S. Maritime Alliance expires Sept. 30, and hundreds of ILA Local 1291 workers at the Port of Philadelphia could be among those striking.
Philadelphia’s port is the 19th busiest in the nation, with $30.5B traded each year, according to the PhilaPort site. If workers walk off, the pain could spread from the shores of the Delaware to the rest of the U.S.
Already, companies plan to wrap up shipments faster or divert them away from East Coast ports altogether in preparation, Jess Dankert, vice president for supply chain at the Retail Industry Leaders Association, told Axios.
The potential stoppage is the latest in a series of headaches for East Coast ports.
Earlier this year, the collapse of the Port of Baltimore’s Francis Scott Key Bridge killed several workers. Amid the tragedy, some ships had to be diverted to Philadelphia and Camden, New Jersey, causing major disruption, Bisnow reported.
At the national level, shipping rates are on the rise amid ongoing turmoil in the Red Sea region, according to Axios. The fragility of the nation's supply chain network was laid bare during the pandemic when ships lined up and waited for days at ports on the West Coast. Since then, a large portion of shipping traffic has been rerouted to the East and Gulf coasts.
The likelihood of a total work stoppage across 36 East Coast and Gulf Coast ports isn't high, Moody's analyst Moses Kopmar told Axios.
But ILA CEO Harold Daggett and his son, ILA Vice President Dennis Daggett, shared a statement to union members on Aug. 11 stating specific issues that haven't been resolved.
“On top of that, when it comes to the Master Contract negotiations, let me be frank — we are very far apart, particularly on the economic issues,” the Daggetts said. “In fact, we are at an impasse.”
