U.S. shippers are steering clear of East and Gulf Coast ports amid worries the 45,000 dockworkers at those trade hubs will go on strike again if their union leader does not land a new contract with employers by a Jan. 15 deadline.
The International Longshoremen’s Association (ILA) labor union and the United States Maritime Alliance (USMX) employer group had ended a three-day strike in October with a tentative agreement on wages, but left the thorny issue of port automation still to be resolved.
“Anything we expect that we need in the back half of January, we’re effectively diverting to the West Coast,” said Chris Peterson, CEO of Graco high chair and Crock-Pot cooker maker Newell Brands, referring to the period after the new contract negotiating deadline.
Remaining contract issues include automation, a key sticking point in negotiations as unions see it as a job-killer while companies view it as a path to better profit.
ILA union leader Harold Daggett wants employers to ditch automation projects that could threaten jobs, even though U.S. ports risk falling behind key global rivals that are embracing technology.
While the union on Friday said it planned to return to the bargaining table next month, many shippers are skeptical that an agreement can be reached without again stopping work at key ports like New York and New Jersey, Houston and Savannah.
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