Ship queue grows at US ports as dockworker strike enters third day

By Doyinsola Oladipo

NEW YORK (Reuters) – Long lines of container ships queued up outside major U.S. ports on Thursday as the biggest dockworker strike in nearly half a century entered its third day preventing unloading and threatening shortages of everything from bananas to auto parts.

No negotiations were scheduled between the International Longshoremen’s Association and employers, but the port owners, under pressure from the White House to hike their pay offer to land a deal, signaled late on Wednesday they were open to new talks.

At least 45 container vessels that have been unable to unload had anchored up outside the strike-stricken East Coast and Gulf Coast ports by Wednesday, up from just three before the strike began on Sunday, according to Everstream Analytics.

“Many seem to have decided to wait it out, possibly in hopes of a prompt resolution to the strike action, rather than taking the proactive decision to divert,” said Everstream’s Jena Santoro in a video presentation seen by Reuters.

She said the vessel backlog could double by the end of the week, and that the resulting congestion could take weeks, if not months, to clear.

One alternative would be to sail to West Coast ports on the other side of the country, likely using the Panama Canal, a journey of thousands of miles that would hike costs and add weeks to delivery times.

The ILA launched its strike by 45,000 port workers from Maine to Texas, its first major stoppage since 1977, on Tuesday after talks for a new six-year contract with the United States Maritime Alliance (USMX) employer group broke down.

The ILA is seeking a big pay raise along with commitments to halt port automation projects it fears will kill jobs. The USMX had offered a 50% pay bump, but the ILA said it was insufficient to address its concerns.

“Reaching an agreement will require negotiating,” USMX said late on Wednesday. “We cannot agree to preconditions to return to bargaining, but we remain committed to bargaining in good faith to address the ILA’s demands and USMX’s concerns,” it said.

President Joe Biden’s administration has sided with the union, heaping pressure on the port employers to raise their offer to secure a deal and citing the shipping industry’s bumper profits since the COVID-19 pandemic.

Economists say the port closures will not initially raise consumer prices as companies accelerated shipments in recent months for key goods. However, a prolonged stoppage will eventually filter through, with food prices likely to react first, according to Morgan Stanley economists.

The strike affects 36 ports – including New York, Baltimore and Houston – that handle a range of containerized goods.

The National Retail Federation on Wednesday, along with 272 other trade associations, called on Biden’s administration to use its federal authority to halt the strike, saying the walkout could have “devastating consequences” for the economy.

Biden’s administration has repeatedly said it will not use federal powers to halt the strike.