By Doyinsola Oladipo and David Shepardson
NEW YORK/WASHINGTON (Reuters) -President Joe Biden said on Thursday he believed progress was being made in a port labor contract dispute, and the Wall Street Journal reported that port operators were ready to offer 62% raises to settle a strike by dockworkers on the U.S. East Coast and Gulf Coast.
The strike, in its third day and the biggest of its kind in nearly half a century, has blocked unloading of container ships from Maine to Texas, threatening shortages of everything from bananas to auto parts, and triggering a backlog of anchored ships outside major ports.
Biden told reporters his expectations of progress on Thursday, without providing details. “We’ll find out soon,” he said.
Port operators are preparing to offer an almost 62% wage hike, the Journal reported, citing anonymous sources.
The International Longshoremen’s Association has been seeking a 77% raise over six years from $30 an hour to $69 an hour while the United States Maritime Alliance (USMX) employer group previously raised its offer to a nearly 50% hike.
A source briefed on the matter earlier had told Reuters it appeared the ILA and employers had narrowed the gap on wages as they work to reach a deal, but the USMX and the ILA did not respond to requests for comment.
There is growing concern about the impact of a long strike. The governors of New York, New Jersey, Massachusetts and Maryland – all affected by shuttered ports – said in a joint statement Thursday it was critical “to reach a fair agreement soon that respects workers and ensures a flow of commerce through our ports.”
At least 45 container vessels that have been unable to unload were anchored outside the strike-hit East Coast and Gulf Coast ports by Wednesday, up from just three before the strike began on Sunday, according to Everstream Analytics.
The ILA launched the strike by 45,000 port workers on the two coasts, its first major work stoppage since 1977, on Tuesday after talks for a new six-year contract broke down.
In addition to a big pay raise, the ILA is seeking commitments to halt port automation projects it fears will kill jobs. The ILA has said previous USMX offers were insufficient to address its concerns.
Biden’s administration has sided with the union, putting 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.
But the administration has repeatedly resisted calls from business trade groups and Republican lawmakers to use federal powers to halt the strike – a move that would undermine Democratic support among unions ahead of the Nov. 5 presidential election.
“The president needs to take a more aggressive stance here,” Republican Senator Shelley Moore Capito of West Virginia told CNBC.
The National Retail Federation on Wednesday, along with 272 other trade associations, also called on Biden’s administration to use its authority to halt the strike, saying the walkout could have “devastating consequences.”
The strike affects 36 ports – including New York, Baltimore and Houston – that handle a range of containerized goods.
Economists say the port closures will not initially raise consumer prices because companies had accelerated shipments in recent months of key goods. However, a prolonged stoppage will eventually filter through, with food prices likely to react first, according to Morgan Stanley economists.
“After the first week, we can expect some impact on perishable products like bananas, other fruits, seafood, and coffee, meaning fewer goods are reaching consumers, potentially driving up prices,” said Tony Pelli, global practice director for security & resilience at BSI Americas.
(Reporting by Doyinsola Oladipo; Additional reporting by David Shepardson in Washington; Writing by Richard Valdmanis; Editing by Sonali Paul and Jonathan Oatis)
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