US Eastern, Gulf Coast Ports Prepare For Shutdown As Dockworkers' Strike Looms

U.S. port operators and shipping companies are preparing for a looming strike by union dockworkers on the East and Gulf coasts that could cost the U.S. economy up to $7.5 billion a week.

Some ports are scheduled to take action as soon as Monday, with the Port of Virginia, near Norfolk, planning to end marine operations at 1 p.m. local time barring a last-minute labor agreement, Bloomberg said Sunday.

Port Houston in Texas and the Port of Boston are reportedly set to shut down at 7 p.m. and 8 p.m. local time, respectively.

The contract between the International Longshoremen's Association (ILA) and the United States Maritime Alliance (USMX), which represents ocean carriers and port terminal operators, expires at the end of Monday, setting the stage for a union-wide strike the next day.

A strike could cost the U.S. economy $4.5 billion to $7.5 billion a week, Bloomberg said, citing the Oxford Economics consulting company.

The world's largest container shipping company, Switzerland-based MSC Mediterranean Shipping Co., said that it might start charging a "emergency operation surcharge" of $3,000 per 40-foot container, effective Oct. 27, on shipments from Asia to the East and Gulf coasts, according to Bloomberg.

Earlier this month, the No. 2 company, Denmark's A.P. Moller-Maersk, announced a similar surcharge, effective Oct. 21, and Germany's Hapag-Lloyd said shipping costs were "expected to rise due to increased demand for alternative routs and port services.

"Emergency surcharges may also be applied to account for additional handling and congestion," the No. 5 company said on its website.

In a statement Sunday, ILA chief of staff James McNamara said the union was "joined in solidarity by tens of thousands of workers around the world" and said it would issue an update at 11 a.m. ET Monday.

If the union's members walk off the job, it would be the first major disruption at American maritime hubs since a nine-month West Coast strike in 2014-15.

ILA members haven't gone on strike on the East Coast since 1977, Bloomberg said.

The union wants guarantees that automation won't eliminate jobs and says its members deserve a larger share of "billions of dollars in revenues and profits" reaped by shipping companies in recent years.

The United States Maritime Alliance (USMX) has accused the union of refusing to bargain since walking away from the table in June and has called on the National Labor Relations Board to force negotiations.

But President Joe Biden has repeatedly boasted about being "the most pro-union president" in American history. The White House — which has urged both sides to resume talks — said this week it won't intervene to break a strike.