BOSTON — The state’s business leaders are urging negotiators to reach a deal to resolve a labor dispute that shutdown cargo ports from Maine to Texas on Tuesday, warning that it could upend the supply chain for consumer goods ahead of the holiday season.
More than 45,000 workers at 14 ports walked off the job overnight after talks between the United States Maritime Alliance, which represents shipping lines and port operators, and the International Longshoremen’s Association, a union representing dock workers, failed to reach an agreement on a new contract.
“USMX brought on this strike when they decided to hold firm to foreign owned Ocean Carriers earning billion-dollar profits at United States ports, but not compensate the American ILA longshore workers who perform the labor that brings them their wealth,” said ILA President Harold Daggett said in a statement.
The strike, which began at midnight, will stop the flow of a wide variety of goods over the docks of almost all cargo ports along the East and Gulf of Mexico coasts. That includes Boston’s Conley Terminal, where about 160 workers are striking. The shutdown will also impact about 12,000 truck drivers, delivery workers and tugboat operators.
The Massachusetts Port Authority said the impact of the strike will be felt at the Port of Boston, which “plays a pivotal role” in the state’s economy, generating more than $8 billion a year.
“We are proud to have a great relationship with the longshoreman here in Boston, who do an incredible job moving more than 250,000 containers a year with truck turn times averaging less than 30 minutes,” a MassPort spokeswoman said in a statement. “This helps keep costs lower for customers and makes the commonwealth attractive to new business.”
Supply chain experts say the state’s consumers won’t see an immediate impact from the strike because many larger retailers stocked up on goods, moving ahead shipments of holiday gift items.
But if the dispute drags on more than a few weeks, a work stoppage could lead to higher prices and delays in goods reaching households and businesses, said Jon Hurst, president of the Retailers Association of Massachusetts.
“This really couldn’t be coming at a worse time,” Hurst said. “We’re going into the fourth quarter here, and the last thing we need is what could become an inflationary supply chain disruption. And the longer this goes on it could lead to higher costs for retailers and ultimately consumers.”
If the strike is drawn out, Hurst said it will force local businesses to pay shippers for delays and cause some goods to arrive late for peak holiday shopping season — potentially impacting delivery of anything from toys and artificial Christmas trees to cars, coffee and fruit.
Joe Bevilacqua, president of the Merrimack Valley Chamber of Commerce, said a prolonged strike will also impact local producers and manufacturers of products ranging from apples to computer chips, who won’t be able to get their products to market.
“It’s too early to tell what the overall impact will be, but there is very real concern in the business community because people remember what happened with the last shutdown during the pandemic,” he said. “We’re hoping that the negotiators can settle this so we can get back to business.”
The labor dispute stems from a new contract that the union says does not provide proper compensation for their work after years of “paltry” wage increases and the impact of inflation. They are also demanding protection against automation of the industry.
In a statement, USMX said over the past 24 hours it had traded counter offers with the longshoreman’s union, including an offer to increase wages by nearly 50% over six years, triple employer contributions to employee retirement plans, strengthen health care options, and retain the current contract language around automation and semi-automation. But the union wouldn’t agree to the proposed contract terms, the alliance said.
The U.S. Department of Transportation said it has been in talks with shippers, carriers, ports, railroads, and other supply chain partners for months to prepare for a potential strike and attempt to mitigate bottlenecks in the supply chain.
But national retailer groups are expected to ask President Joe Biden to intervene and end the strike using the Taft-Hartley Act, which allows him to seek an 80-day cooling off period, Hurst said.
Biden has so far declined to get involved, but issued a statement on Tuesday urging the negotiators to minimize disruptions from the labor dispute by reaching an agreement.
“The president has directed his team to convey his message directly to both sides that they need to be at the table and negotiating in good faith — fairly and quickly,” the White House said.
Nationwide, the strike could cost the economy $3.8 billion to $4.5 billion per day, with some of that recovered over time after normal operations resume, according to a recent J.P. Morgan analysis.
Christian M. Wade covers the Massachusetts Statehouse for North of Boston Media Group’s newspapers and websites. Email him at cwade@cnhinews.com.