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ILA strike, is first such strike by the union since 1977

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Strike could cost the economy an estimated $5 billion a

day

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Strike disputes include pay, terminal automation project

issues

By Doyinsola Oladipo

NEW YORK, Oct 1 (Reuters) - Dockworkers on the U.S. East

Coast and Gulf Coast were expected to strike on Tuesday morning

after a midnight deadline passed with no sign of a new contract

deal with port owners. The strike is forecast to halt about half

the nation's ocean shipping.

The strike will block everything from food to automobile

shipments across dozens of ports from Maine to Texas, in a

disruption analysts warned will cost the economy billions of

dollars a day, threaten jobs, and stoke inflation.

The International Longshoremen's Association (ILA) union

representing 45,000 port workers had been negotiating with the

United States Maritime Alliance (USMX) employer group for a new

six-year contract ahead of a midnight Sept. 30 deadline.

But the ILA's fiery leader, Harold Daggett, said employers

like container ship operator Maersk and its APM

Terminals North America had not offered appropriate wage

increases or agreed to demands to stop port automation projects.

The USMX said in a statement on Monday it had offered to hike

wages by nearly 50%.

The ILA said in statements on Sunday and Monday that a port

strike would go ahead, starting on Tuesday at 12:01 a.m. ET.

The strike, the ILA's first since 1977, is worrying

businesses across the economy that rely on ocean shipping to

export their wares or secure crucial imports. The strike affects

36 ports that handle a range of containerized goods from bananas

to clothing to cars.

The union is "holding the entire country over a barrel,"

said Steve Hughes, CEO of HCS International, which specializes

in automotive sourcing and shipping. "I'm really afraid that it

is going to be ugly."

The dispute is also wedging labor-friendly U.S. President

Joe Biden into a virtual no-win position as Vice President

Kamala Harris runs a razor-tight election race against

Republican former President Donald Trump.

Biden administration officials had met with both USMX and

ILA ahead of the strike to encourage a deal. But Biden's

administration has repeatedly ruled out the use of federal

powers to break a strike in the event of an impasse.

U.S. Chamber of Commerce President Suzanne Clark urged Biden

on Monday to reconsider, saying it "would be unconscionable to

allow a contract dispute to inflict such a shock to our

economy."

Retailers accounting for about half of all container

shipping volume have been busily implementing backup plans as

they head into their all-important winter holiday sales season.

Many of the big players rushed in Halloween and Christmas

merchandise early to avoid any strike-related disruptions,

incurring extra costs to ship and store those goods.

Retail behemoth Walmart ( WMT ), the largest U.S. container

shipper, and membership warehouse club operator Costco

say they are doing everything they can to mitigate any impact.

New York Governor Kathy Hochul said on Monday the state

expects no immediate impact on food suppliers or essential

goods.