Port of Baltimore cranes. Photo courtesy Port of Baltimore.
The International Longshoremen’s Association and its 45,000 members from Maine to Texas were set to strike at 12:01 a.m. Tuesday when the current contract with the U.S. Maritime Association expires.
The strike would shut down operations at the Port of Baltimore just months after federal and state agencies managed to reopen the facility that had been closed by the March 26 collapse of the Francis Scott Key Bridge into the Patapsco River, blocking shipping channels in and out of marine terminals there.
Unlike that event, however, the strike would shut down every port along the East and Gulf coasts, with the potential to disrupt supply chains across the country and lead to the loss of hundreds of millions in salaries and economic activity.
“This will have a real impact,” said Christina DePasquale, an associate professor of economics at Johns Hopkins University’s Carey Business School. “The effects could be felt everywhere, on the East Coast and then even outside of that in terms of warehouses, retail establishments, businesses outside of the East Coast. It would really touch most aspects of the supply chain in the United States.”
The union on Monday was blaming the Maritime Association, which represents shippers, for causing the strike by blocking the “path toward a settlement … by refusing ILA’s demands for a fair and decent contract.”
In addition to higher wages – published reports have said that longshoremen are seeking as much as a 77% raise over a six-year contract – the union is calling for more generous health care benefits and a ban on automation of port operations.
But the shippers – known by shorthand USMX – put the blame back on the union, saying it has refused to come to the bargaining table to negotiate a contract. It filed an unfair labor practices complaint against the union with the National Labor Relations Board on Thursday.
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USMX said earlier this month that it has offered a continuation of health benefits and automation protections as well as higher wages and retirement contributions.
President Joe Biden said Sunday that he does not intend to intervene in negotiations or take action to head off the strike, saying it is a collective bargaining agreement that should be worked out between the ILA and USMX.
In a statement, the Maryland Port Administration said it was monitoring the situation and imploring both sides “to come together and negotiate an agreement that properly compensates the men and women of the ILA while maintaining cost effective and efficient cargo flows.”
”The port industry is one of our nation’s leading job generators and is critically important to our national supply chain. We remain hopeful that an agreement will be reached very soon,” the MPA statement said.
If dockworkers go on strike, it would be the first strike by the ILA against Gulf Coast and East Coast ports since 1977. The union on the West Coast signed a contract last year that calls for a 32% increase in wages over the six years of that contract.
The union has said the East Coast strike would not affect cruise ships or shipment of military cargo. But those make up only a fraction of the traffic in and out of Baltimore.
The Moore administration said the port ranked first in the nation in 2023 for volume of autos and light trucks, roll-on/roll-off heavy farm and construction machinery, imported sugar and imported gypsum. It ranked ninth among major U.S. ports for foreign cargo handled and ninth for total foreign cargo value.
An analysis for the port administration of activity in 2023 said the public and private terminals at the port were directly responsible for more than 20,000 jobs and indirectly for another 30,000, generating more than $5 billion in income in total. It said the port generated $3.9 billion in revenues last year and spun off $647.1 million in state and local taxes.
After the Key Bridge collapse, the state rushed to provide aid to workers and businesses affected by the subsequent port shutdown. The Moore administration said in June, as it was starting to wind down those programs, that the state had provided $37.4 million in worker assistance since early April, and $22 million to support affected businesses in the Baltimore region. It said then that 2,800 workers received direct financial assistance and it claimed that more than 3,000 jobs were protected from layoffs as a result of the business support.
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But an East Coast strike will be much more far-reaching, and offers no such direct assistance as the Key Bridge collapse generated. Cargo can’t be rerouted to other nearby ports as was done then.
A report by the economic analysis firm Implan estimates that the strike could reduce the gross domestic product by $981 million and result in $545 million in lost worker salaries for every month the strike continues. And that does not account for effects on the larger economy from supply chain disruptions.
“Anecdotally, supply chain disruptions might lead to increased costs for goods, which could contribute to inflationary pressures. If the strike prolongs, it could exacerbate existing supply shortages and drive prices higher,” said a statement from Bjorn Markeson, the Implan economist who prepared the analysis.
DePasquale that the port is “absolutely … an important aspect of the Baltimore economy,” generating jobs and wages directly and indirectly, and any impact on the port would likely have a ripple effect across the local and regional economy.
“It’s not just Baltimore,” DePasquale said. “The answer isn’t go over to Virginia … and providing state government assistance to the people who are directly and indirectly impacted by this.”
Shutting down all the East Coast and Gulf Coast ports could hurt the supply chain for a range of goods, she said, and could affect the shipping of holiday goods.
“People who rely on just-in-time inventory … pharmaceutical companies, right, who for obvious reasons don’t stock up on goods, you’re going to immediately feel that impact,” DePasquale said.
“Of course the shorter the strike is, the less of the effect the downstream consumer will feel,” she said. “However, if for some reason the strike went on, a week, two weeks, a month, that’s going to be a real negative to the supply chain because it’s the entire East Coast, right, it’s not just the port of Baltimore.”