NC Ports ready contingency plans as worker strike looms

A threatened Oct. 1 worker strike on the ports of the East Coast and Gulf of Mexico by the International Longshoremen’s Association (ILA) has the potential to disrupt commerce across the country. On September 30, the contract between the ILA and the United States Maritime Alliance (UMX), covering an estimated 45,000 workers at three dozen ports on the Gulf of Mexico and East Coast, will expire.

The US Department of Labor is scrambling to hammer out a deal in order to avoid the economic disarray that would come from an extended strike as businesses move to build inventory ahead of the holiday season. But contract negotiations between the ILA and UMX are reportedly at a stalemate, increasing the likelihood of a crippling strike in the coming weeks.

So, what about North Carolina? We have two ports of commercial consequence: the Port of Wilmington, and the Port of Morehead City. While North Carolina Ports Authority is not a party to the contract between ILA and UMX, according to Laura Blair, vice president of administration and external affairs for NC Ports, they’ve prepared contingency plans nonetheless.

Technically, no ILA members work for NC Ports directly, but that doesn’t mean there aren’t ILA members working the docks. Third parties often manage operations at our ports, including the mixed labor resources here in the Tar Heel State.

Carolina Journal reached out to the ILA to get a better understanding of how many members currently work ports in North Carolina. Unfortunately, the ILA, including its officers, are not available for interviews prior to the expiration of the contract.

Through a Sept. 25 press release, however, the ILA has pledged to handle all military cargo operations normally, regardless of any strike. “We continue our pledge to never let our brave American troops down for their valour and service and we will proudly continue to work all military shipments beyond October 1st, even if we are engaged in a strike,” said ILA president Harold Dagget.

NC Contingency plans

“North Carolina Ports operates under a hybrid operating model, meaning there are both union and non-union jobs,” Blair stated in an email to Carolina Journal. “Because we are not a direct party to the negotiations, I can’t speculate [about NC impact]. We have made contingency operating plans in the event of a work stoppage.”

Those plans imply a significant reliance on the ILA focused in the Port of Wilmington, as its container operations would face the higher impact of said work stoppage. For its part, the Port of Morehead City, a different operation specializing in different cargo (with presumably less ILA dependency) requires no such plan.

“In anticipation of a possible East Coast and Gulf work stoppage on October 1, North Carolina Ports has developed the following contingency plan for the Port of Wilmington,” reads the plan’s introduction, adding, notably, that “North Carolina Ports will recognize any and all work stoppages.”

According to the plan, the Port of Wilmington’s South (Container) Gate will be open with normal operating hours from 7am until 6pm on Sept. 30, the day before contract expiration. After that, operations in Wilmington will alter significantly, if a strike does occur.

For one, that important Container Gate will close. The rest of the contingencies for the Port of Wilmington, in the event of a work stoppage, are as follows (emphasis added):

• All vessels must complete work, and vacate the berth at the Port of Wilmington by 11:59 pm on Monday, September 30. 
• After a work stoppage, if a vessel does not have prior approval, it will not be brought alongside the berth at the Port of Wilmington.
• No impacted carrier’s rail / intermodal cargo will be worked on or off the rail at the Port of Wilmington.
• All import cargo on the at the Port of Wilmington, either within free time or in demurrage, should be delivered prior to October 1.
•  No cargo will be delivered from the Port of Wilmington once a work stoppage begins.
• There are no restrictions on the receipt of export cargo. 
• Export cargo will be received while our gates at the Port of Wilmington are open.
• NC Ports will not be liable for any damage to or loss of cargo that remains on terminal at the Port of Wilmington during the work stoppage.
• The billing clock will be paused during the work stoppage.
• NC Ports is not aware of any provisions between the ILA and the USMX permitting refrigerated containers to be monitored or maintained during the work stoppage.
• Charlotte Inland Port (CIP) will operate as normal.

Fallout

Such significant work stoppages may carry economic risks for the people of North Carolina.

The Port of Wilmington has, in recent years, expanded its capacity for cold storage. Having cold treatment facilities increases the value of port operations for people and business in North Carolina, allowing for the expanded handling of fresh produce and frozen food products, as well as medical grade shipments like plasma supplies that require specific temperature controls.

That enhanced capacity means more refrigerated containers (reefers) are passing through the Port of Wilmington than ever before. If an ILA strike prevents the monitoring or maintenance of any reefers left on the docks, product losses could mount. As spelled out in the plan, NC Ports will not be held liable for such losses.

Beyond the reefers, a lot of additional port activity would effectively “freeze,” too. No cargo will be unloaded during an ongoing strike, meaning businesses relying on imported materials for manufacturing, or importing food products to offer local residents, or retailers importing product stock to replenish and/or build inventory, will be frozen, as well.

Of course, with three dozen ports affected, the potential impact on North Carolina’s economy is hardly limited to contingency plans at the Port of Wilmington. Andy Ellen, president and general counsel of the North Carolina Retail Merchants Association (NCRMA), worries an extended work stoppage at so many ports will lead to shortages and higher prices, just when business owners and consumers can least afford it.

“The pending strike of workers at the ports in the Gulf and on the East Coast, including North Carolina ports such as Wilmington, will have a devastating impact on both the economy and consumer’s pocketbooks,” said Ellen in a statement to Carolina Journal. “The 36 ports impacted receive 41% of the country’s containerized port volume. North Carolina‘s retailers are very concerned a strike will cause severe disruption to the supply chain, similar to what we saw in 2021, and that consumers will see product shortages and higher prices on store shelves at a time when inflation is just starting to ease. An elongated work stoppage will also significantly impact the 4^th quarter holiday shopping season.”

Supply chain breakdowns in the aftermath of pandemic policies in 2021, which closed or limited manufacturing production and logistics resources, reverberated through the economy for months causing scarcity and inflation. As Ellen mentions, the potential ILA strike comes just as that inflation is beginning to level out.

The fallout from a potential union strike is especially interesting considering North Carolina’s status as a right-to-work state, meaning public sector unions are banned and personal union membership cannot be compulsory as a condition of employment. Even so, the current contract dispute regarding ILA reveals North Carolina is not exactly insulated from the negative effects of large union activity.

“This story underscores the importance of preserving North Carolina’s status as a Right-to-Work state,” said Brian Balfour, senior vice president of research for the John Locke Foundation. “Without these protections, workers may be forced to join a union and unwittingly become pawns in disputes between big labor and big business. The best way to cement such right-to-work protections would be for North Carolina to enshrine the law in its constitution.”

The deadline for a deal between ILA and UMX to avoid a strike is 11:59PM on Sept. 30.

The post NC Ports ready contingency plans as worker strike looms first appeared on Carolina Journal.