US East Coast Ports Union Prepping for Possible Strike

The International Longshoremen's Association union, representing 45,000 workers at major container ports from Texas to Maine, will begin two days of meetings on Wednesday to review wage demands and prepare for a potential strike on Oct. 1.

Formal talks have reached an impasse as the union and the United States Maritime Alliance employer group wrangle over pay, automation, healthcare and retirement benefits.

A source familiar with the negotiations said the ILA has asked for a 77% pay bump over the life of the new contract. Three experts told Reuters the final increase would likely improve on the 32% rise the West Coast longshore union negotiated last year.

ILA International President Harold Daggett has warned that union workers will walk off the job if a new labor agreement is not reached before the current six-year contract expires on Sept. 30.

USMX said in statements it has been trying to set a meeting with ILA to resume talks.

Any work slowdown or stoppage would affect key ports - including New York/New Jersey, Houston and Charleston, South Carolina - backing up goods ahead of the key holiday season and U.S. presidential elections.

Such disruptions would have "serious ripple effects" on global supply chains already under pressure from Red Sea diversions, said Vincent Clerc, CEO of A.P. Moller-Maersk, last week at an event in Los Angeles.

Maersk is a USMX member company. When asked about the status of the talks, Clerc said negotiators previously had been able to "take it from the brink" and reach an agreement.

Shippers that depend on affected ports are not taking chances, and many have brought in goods early to mitigate risk.

Still, each day without a deal fuels worries about a strike.

The National Retail Federation on Tuesday urged the two sides to return to the bargaining table, following similar calls by the Retail Industry Leaders Association and American Apparel & Footwear Association.

"A strike or other disruption would significantly impact retailers, consumers and the economy. The administration needs to offer any and all support to get the parties back to the table to negotiate a new contract," NRF CEO Matthew Shay said in a statement.

(Reuters - Reporting by Lisa Baertlein; Editing by Richard Chang)