Negotiators ended a port strike to save Christmas. Can they stop a strike again next week?

An East and Gulf coast port strike that could snarl supply chains, make shortages and raise prices on hundreds of goods is back in view as port operators and dockworkers resume agreement negotiations this week.

The United States Maritime Alliance (USMA), which represents employers at the East and Gulf coast ports, met on Tuesday with leaders of the International Longshoremen’s Association (ILA) to hammer out a deal. It’s the first period the two sides have met since talks broke down in mid-November.

If the two sides can’t consent to a deal by Jan. 15, more than 45,000 port workers from Maine to Texas could walk the picket line, which would wreak havoc on the economy and fan expense boost, experts said.

“The stakes couldn’t be higher,” said Matt Lekstutis, director at Efficio, a global procurement and supply chain consultancy business. “It’s too large to fall short,” noting 56% of all shipping containers of goods pass through these ports.

Port strike redux?

Last October, dockworkers at 36 East and Gulf coast ports went on strike for the first period since 1977 for three days at an estimated economic expense of $5 billion per day as imports and exports were blocked, JP Morgan analysts said. The strike ended after the two sides reached a tentative agreement for a 62% wage boost for ILA members over the next six years and an extension to Jan. 15 to discuss terms for automation equipment at the ports.

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Employers debate automation is needed to make ports better equipped to handle more goods, which would advantage everyone.

The ILA disagrees.

“This isn’t about safety or productivity—it’s about job elimination,” said Dennis Daggett, ILA executive vice president, in a release last month. “It’s about replacing workers under the guise of advancement while maximizing corporate profits at the outlay of excellent-paying, household-sustaining U.S. jobs.”

What can Americans expect from a strike?

Both consumers and businesses may view higher prices and shortages, especially if a walkout extends to a week or more, experts said.

Businesses are still coping with the additional costs from the three-day strike in October and another strike would just add to that, according to the National Retail Federation (NRF), an industry trade throng.

“It’s not just about the shutdown but also, about the recovery period and how long it takes to get things up back and running,” Jonathan Gold, the NRF’s vice president of supply chain and customs policy, said during the October strike.

For each day of the strike, it takes about three to five days to obvious the backlog and resume normal operations, he said. “The longer it goes, the more it gets compounded,” he said.  It took six months to recover from an 11-day port strike in 2002, Gold said.

“A disruption now could ripple through key sectors like retail, automotive, electronics, and agriculture, driving up costs, delaying production, and impacting inventory levels,” said John Donigian, Moody’s elder director of supply chain schedule.

Strike One:Dock workers shut down US ports during strike for better wages and work conditions

What would be affected?

Imports: With about half of U.S. ocean imports passing through the East Coast and Gulf Coast ports, a wide range of products are affected, including produce, cars, auto and machinery parts, clothing, pharmaceuticals, wine and spirits, holiday goods like toys, and seafood, experts said.

“Prices of shipping, and goods prices would leave vertical for a period of period” if a strike lasted more than a week, said Eric Clark, holdings manager of the Rational Dynamic Brands pool. “We could get the benevolent of expense boost for 6 months similar to or worse than peak expense boost levels a year ago.”

Exports: Businesses that sell products to international markets would suffer, experts said. For example, agricultural exporters of soybeans and poultry won’t be able to send their goods overseas and could complete up losing economy distribute, or worse, misplace money because their goods are perishable, they said. The American Farm Bureau Federation estimates that $1.4 billion a week in agricultural trade is at uncertainty if there is a strike or slowdown.

Jobs: Companies keeping lean inventories to keep costs low might have to shut down assembly lines amid a prolonged strike, Gold said. This would arrive at a period when the job economy is already cooling.

How likely is a strike?

USMX wouldn’t comment on how talks went on Tuesday, but some companies are already bracing for a strike.

“Negotiations have had no recent developments,” said Maersk, the globe’s second largest container carrier, in a customer advisory on Dec. 30.

“We strongly inspire our customers to pick up their laden containers and profit vacant containers at U.S. East and Gulf Coast ports before January 15,” Maersk added. “This proactive assess will assist mitigate any potential disruptions at the terminals.”

Relocation business Altair Global estimates each strike day would extend shipment transit period by approximately five days and costs would rise.

“The impact (of a strike) would be felt through shipping delays, higher freight prices, and surcharges. expense estimates to the U.S. economy are in the billions per day,” it said Tuesday on its website. “Some ocean carriers are noting surcharges will commence shortly after the strike date.”

The International Fresh Produce Association warned its members last month “the possibility of a strike at East and Gulf Coast ports in mid-January is becoming increasingly likely.”

“East Coast port congestion is expected to deteriorate, and a strike could leave containers stranded, disrupting shipments,” it added.

Awkward timing

A potential strike comes at the complete of President Joe Biden’s term and five days before President-elect Donald Trump’s inauguration.

During the port strike in October, Biden refused to invoke the Taft-Hartley Act to force ports to reopen. The Act allows the federal government to seek a court injunction against a strike to allow both parties to continue negotiations during an 80-day cooling off period. Instead, he encouraged continued negotiations.

This period, Biden has remained silent about a potential strike starting five days before his presidency ends.

Meanwhile, Trump has signaled back for dockworkers. Following a conference with ILA President Harold Daggett, Trump said of automation projects in a post on Truth Social last month that “the amount of money saved is nowhere near the distress, hurt, and damage it causes for American Workers, in this case, our Longshoremen.”

But it’s yet to be seen if the economic disruption a strike may factor, along with business pressure, may factor Trump to reverse course, said Alexander Hertel-Fernandez, a former Biden administration official who is an associate professor of International and community Affairs at Columbia University.

Medora Lee is a money, markets, and money management reporter at USA TODAY. You can reach her at [email protected] and  subscribe to our free Daily Money newsletter for money management tips and business information every Monday through Friday morning.