Ship queue increases at major US ports as dockworkers' strike enters third day

According to reports, no talks were scheduled between the International Longshoremen's Association (ILA) and port employers, but the port owners, pressured by the White House to increase their pay offer, signaled late Wednesday that they were open to new negotiations.

As of Wednesday (Oct. 2), at least 45 container ships were anchored outside affected East Coast and Gulf Coast ports, a significant rise from the three ships waiting before the strike began on Sunday (Sept. 30), Reuters reported, citing Everstream Analytics.

"Many ships seem to be waiting out the strike, hoping for a quick resolution, instead of taking action to divert," said Everstream's Jena Santoro in a video presentation watched by Reuters.

Santoro warned that the backlog of ships could double by the end of the week, with port congestion potentially taking weeks or months to clear.

An alternative for shipping companies would be rerouting vessels to West Coast ports via the Panama Canal, a costly and time-consuming option that could add weeks to delivery schedules, as per reports.

The ILA initiated the strike on Tuesday, involving 45,000 workers from Maine to Texas, following a breakdown in talks with the United States Maritime Alliance (USMX) over a new six-year contract.

The strike marks the first major stoppage since 1977, according to reports.

The ILA is demanding a significant wage increase and guarantees to stop port automation projects, which it argues would result in job losses.

While the USMX has offered a 50 percent pay hike, the ILA considers it insufficient to address their concerns.

"Reaching a deal will require negotiations," the USMX said late Wednesday, expressing willingness to engage in discussions but rejecting any preconditions for resuming talks, according to Reuters.

The group stated that they are committed to bargaining in good faith to address both the ILA's demands and USMX’s concerns.

The Joe Biden administration has aligned with the union, urging port employers to increase their pay offer to finalize an agreement, citing the substantial profits the shipping industry has enjoyed since the Covid-19 pandemic, as per reports.

Economists believe the port closures will not immediately impact consumer prices, as businesses have sped up shipments of key goods in recent months.

However, a prolonged strike could eventually lead to higher prices, particularly for food items, according to Morgan Stanley economists.

The strike impacts 36 ports, including major hubs like New York, Baltimore, and Houston, which handle a wide range of containerized goods, according to reports.

On Wednesday, the National Retail Federation, alongside 272 other trade associations, called on the Biden administration to use federal authority to stop the strike, warning of "devastating consequences" for the economy, as reported by Reuters.

Despite these concerns, the Joe Biden administration has reiterated that it will not intervene to halt the strike using federal powers, according to reports.