With talks stalled and more labor demands being put on the table, a dockworkers strike at ports along the US East and Gulf coasts looks increasingly inevitable with just two weeks remaining on the current contract between maritime employers and the International Longshoremen’s Association (ILA).

And that means ports and ocean carriers are now figuring out the playbook for how to handle what would be the first strike to hit those coasts in nearly half a century.

The United States Maritime Alliance (USMX), which represents maritime employers, said in a statement Friday “there has been no further progress” in negotiations with the ILA on a new master contract. The ILA said its members will not work past the current contract’s Sept. 30 expiration if there is no new agreement in place.

More concerningly for employers, the USMX said the ILA has not been willing to meet for negotiations on a new contract. The USMX’s request for further meetings comes about a week after it said that the ILA “continues to strongly signal” that it has made the decision to strike.

“We need to sit down and negotiate a new agreement that avoids an unnecessary and costly strike that will be detrimental to both sides,” the USMX said in its statement.

The Journal of Commerce spoke to marine terminal operators, port authorities, and employer representatives for this story. According to those sources, no further talks with the ILA have been scheduled.

On the master contract, the gap over wages appears widest, with the union seeking a $5 per-hour increase for each year of the contract’s six-year term, while the USMX has proposed a $2.50 per-hour increase.

Outside of wage increases for all dockworkers from Maine to Texas, the union has put out that it is seeking in the new contract an array of concessions from ocean carriers and terminal operators, including a higher entry-level wage, increased employer contributions to pension and benefit funds, and stricter terms on the use of automation at marine terminals.

For now, it appears that ocean carriers — which will bear most of the cost of a wage increase for longshore workers — are taking a hard line on conceding to the ILA’s proposed wage increase, much less its other demands.

‘Not going in the right direction’

As required under federal labor law for collective bargaining agreements that could result in a strike, the ILA and USMX have alerted the US Federal Mediation and Conciliation Service that contract negotiations have stalled. The notification is procedural, however, with no mediator being appointed.

Acting US Labor Secretary Julie Su called USMX President Dave Adam about progress on the ILA talks, according to sources familiar with matter, who said Adam characterized the talks as “not going in the right direction [and the] strike threat should be taken seriously.”

The USMX declined to comment.

The ILA’s executive leadership under President Harold Daggett, who is spearheading the union’s negotiations, drummed up support for a strike from ILA’s coast-wide locals during two days of meetings of its wage-scale committees in New Jersey earlier this month. This year’s event stood out from previous wage-scale meetings for not inviting a representative of the USMX to present its position, according to a source, underscoring the gulf between the two sides.

Following the wage-scale meeting, delegates returned to their locals to garner support for a strike. According to a source familiar with the union’s bylaws, Daggett will not need a vote to call a strike, allowing one to go ahead quickly.

Yet a strike will not mean port-wide closures. The ILA has pledged to keep handling military roll-on, roll-off cargo and cruise ships. Container operations will be affected, although it’s unclear how widespread the disruption will be.

During the current contract talks, the ILA has largely targeted Maersk for automation projects that it has undertaken at its APM Terminal’s facility at the Port of Mobile in Alabama, leading some sources to speculate that its facilities will be specifically targeted for labor actions and slowdowns.

However, if the union decides to target one member of the USMX for a labor action, the USMX’s bylaws require all its members to lock out the union, according to a source familiar with the issue, which would force the closure of all container operations.

‘Preparing for a hurricane’

A port authority along the US East Coast that operates its own terminals has been meeting to discuss how it will handle an orderly wind down of its operations should a strike occur on Oct. 1, according to a source who asked that the agency not be identified. Any non-port operations, such as inland rail ramps, could remain open as they do not use ILA labor. But train service will be curtailed due to port closures.

The discussions include the cut-off dates for receiving exports or empty containers and extending gate hours for picking up import boxes up until the strike, the source added. The source said the port authority is in discussions with the local union on how to maintain refrigerated containers at the port on a contingent basis.

“It’s like we’re preparing for a hurricane,” the source said.

It’s unclear what plans ocean carriers have for coast-wide container terminal shutdowns. CMA CGM’s North American President George Goldman told the Journal of Commerce that the carrier plans to step up empty container evacuations through the West Coast to ensure no backlog of empties sits at East and Gulf coast ports, taking “into account that there’s going to be a potential disruption.”

An executive of a marine terminal operator told the Journal of Commerce that there is no contingency plan available other than an orderly shutdown. While shippers have raised questions about waiving terminal demurrage during a port strike, the source said it will be on a customer-by-customer basis.

Other operations may also be affected, including container and chassis depots that employ ILA members. The East Coast port authority, which also operates its own chassis pool, said that it plans to waive any fees related to chassis returns affected by a strike.

The Metropolitan Marine Maintenance Contractor’s Association, which represents container and chassis depot operators through the Port of New York and New Jersey, has an agreement with the local ILA union representing chassis and container maintenance workers that expires at the end of 2024.

However, it’s unclear whether ILA maintenance workers will cross picket lines of ILA dockworkers, a source familiar with the issue said, adding that such an action could amount to a secondary boycott if operations outside of marine terminals were affected.