East and Gulf Coast dockworkers could strike tonight. Here's what's at stake

Some 25,000 dockworkers at East Coast and Gulf Coast ports, from Boston to Houston, are preparing to strike at midnight tonight, halting the movement of billions of dollars worth of goods including furniture, paper, manufacturing components, medications, vehicles and much more.

The dockworkers' union, the International Longshoremen's Association, has been in contract talks with the United States Maritime Alliance, representing ocean carriers and port operators, for months. But the two sides have not met face-to-face since June and appear to be far apart on key issues.

House Republicans and more than 170 industry groups, from the National Association of Manufacturers to the U.S. Dairy Export Council to the Fashion and Jewelry Trade Association, have urged the Biden administration to intervene, warning that a strike would have a devastating impact on the economy.

On Sunday, President Biden said he would not intervene.

"It's collective bargaining. I don't believe in Taft-Hartley," he told reporters, citing the federal law that allows the President to call for an 80-day cooling off period when the nation's safety is at risk.

What's the stalemate about?

Two major sticking points are wages and automation. On wages, neither side has made their demands or offers public.

A statement from union president Harold Daggett suggested the union may be seeking a $5-an-hour increase in each year of a six-year agreement, raising the top hourly wage from $39 to $69 by the end of the contract.

Wage increases under the current contract, signed in 2018, were far more modest, with only $1-an-hour increases in four of the six years. That contract, which expires Monday, spanned the pandemic, when dockworkers stayed on the job, and months of soaring inflation.

The U.S. Maritime Alliance says its current offer includes "industry leading wage increases." West Coast dockworkers got 32% raises in their contract negotiations last year.

On automation, Daggett has been warning dockworkers that the foreign companies that operate the marine terminals are seeking to replace them with machines.

At ports around the world and even on the West Coast, advanced technology is already being used to move shipping containers.

The U.S. Maritime Alliance has said it's offered to keep the current ban on fully automated equipment and the requirement that any use of semi-automated equipment be negotiated.

In fact, the effect of automation on dockworkers isn't a completely settled matter. The shipping industry, backed by researchers at UC Berkeley, has made the argument that automation is helping ports stay competitive and handle more goods, which in turn creates demand for highly skilled workers.

The International Longshoremen's Association remains staunchly opposed, citing job losses due to automation on the West Coast.

Which ports would be affected?

There are more than a dozen ports where dockworkers could strike, according to the U.S. Maritime Alliance. They are the Ports of Boston, New York/New Jersey, Philadelphia, Wilmington, Del., Baltimore, Norfolk, Wilmington, N.C., Charleston, Savannah, Jacksonville, Miami, Everglades (Fort Lauderdale), Tampa, Mobile, New Orleans and Houston.

Dockworkers at West Coast ports are represented by a different union. They reached a new contract agreement last year after a prolonged negotiation.

What does this mean for goods coming from overseas?

It depends on the goods.

A lot of stuff flows through the East and Gulf Coast ports, everything from agricultural products to pharmaceuticals to heavy machinery to clothes, shoes and toys.

East and Gulf Coast ports account for more than half of containerized imports, according to the National Association of Manufacturers.

With the labor dispute brewing, some retailers starting shipping goods earlier and have been diverting some shipments to the West Coast, says Jonathan Gold, vice president of supply chains and customs for the National Retail Federation.

"We certainly hope there won't be empty store shelves," says Gold, noting the upcoming holidays. "I think retailers are doing everything they can to ensure that won't happen."

But a work stoppage could wreak immediate havoc for other businesses, including manufacturers who rely on "just-in-time" inventories for production of goods, and agricultural exporters who have a short window of time to get their products overseas.

And Gold notes, even a one-day shutdown would be damaging, as it would likely take several days to get operations up and running again.

What has the White House said?

The Biden administration says it's encouraged all parties to keep negotiating and to do so in good faith. On Friday, Transportation Secretary Pete Buttigieg and Acting Labor Secretary Julie Su met with U.S. Maritime Alliance representatives and throughout the week had "also been in touch" with the union, according to the White House.

In a video posted by the union in early September, union president Daggett expressed frustration with Biden for not doing enough to help dockworkers and criticizing him for pushing West Coast dockworkers to settle their contract quickly.

The sharp rebuke came four years after Daggett endorsed Biden in the 2020 election.

More recently, in 2022, freight rail workers were deeply angry with Biden for signing a measure that imposed a contract on them, blocking a nationwide rail strike.

Ahead of the presidential election, the administration would likely not want to risk such blowback from labor groups, one of its key constituencies.