U.S. port operators and shipping companies are preparing for an imminent strike by union dockworkers on the East and Gulf coasts that could cost the U.S. economy up to $7.5 billion a week.
The International Longshoremen's Association will officially go on strike Tuesday, Reuters reported Sunday.
The contract between the ILA and the United States Maritime Alliance (USMX), which represents ocean carriers and port terminal operators, expires at the end of Monday.
"United States Maritime Alliance ... refuses to address a half-century of wage subjugation," the union said in a statement on Sunday in announcing that the strike would go forward.
A strike could cost the U.S. economy $4.5 billion to $7.5 billion a week, Bloomberg reported, 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.
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.
If the strike goes ahead, 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 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.
