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ILA threatens strike, would be 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

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Biden administration urges negotiations

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Retailers stock merchandise to avoid holiday disruptions

By Lisa Baertlein, Timothy Aeppel and David Shepardson

Sept 30 (Reuters) - U.S. East and Gulf Coast port

workers are set to go on strike at midnight on Monday with no

talks currently scheduled to head off a stoppage threatening to

halt container traffic from Maine to Texas and cost the economy

as much as $5 billion a day.

The labor contract between the International Longshoremen's

Association (ILA) union representing 45,000 port workers and the

United States Maritime Alliance (USMX) employer group expires

late Monday, with negotiations at an impasse over pay.

A port strike will go ahead starting Tuesday at 12:01 a.m.

ET, the ILA said on Sunday. The USMX "refuses to address a

half-century of wage subjugation," the union said in a statement

on Sunday.

If union members do walk off the job, it would be the first

coast-wide ILA strike since 1977, affecting ports that handle

about half of the nation's ocean shipping.

No negotiations are taking place and none are planned before

the Monday deadline, a person familiar with the matter said on

condition of anonymity as the matter is a sensitive one.

The union has previously said the strike would not impact

military cargo shipments or cruise ship traffic.

But a strike could stop the flow of everything from food to

automobiles at major ports, potentially jeopardizing jobs and

stoking inflation weeks ahead of the U.S. presidential election.

Business Roundtable, which represents major U.S. business

leaders, said it was "deeply concerned about the potential

strike at the East Coast and Gulf Coast ports."

The group warned a labor stoppage could cost the economy

billions of dollars daily, hurting businesses, workers and

consumers across the country. "We urge both sides to come to an

agreement before Monday night's deadline."

A short strike could have a limited economic impact given

many companies have imported extra goods ahead of a possible

work stoppage or shifted more shipments to West Coast ports. But

a strike that continues for weeks could have serious economic

impacts.

"These people today don't know what a strike is," Harold

Daggett, the ILA's fiery leader, said in a recent video post.

"I'll cripple you. I will cripple you."

For months, Daggett has threatened to shut down the 36 ports

covered by his union if employers like container ship operator

Maersk and its APM Terminals North America do not

deliver significant wage increases and stop terminal automation

projects.

The dispute is worrying businesses that rely on ocean

shipping to export their wares, or secure crucial imports.

Steve Hughes, CEO of HCS International, which specializes in

automotive sourcing and shipping, accused the ILA of "holding

the entire country over a barrel."

HIGH STAKES

An ILA strike could wedge labor-friendly President Joe Biden

into a no-win position as Vice President Kamala Harris runs a

razor-tight election race against former President Donald Trump.

Biden on Sunday said he did not intend to intervene to

prevent a walkout if dock workers failed to secure a new

contract.

U.S. presidents can intervene in labor disputes that

threaten national security or safety by imposing an 80-day

cooling-off period under the federal Taft-Hartley Act, forcing

workers back on the job while negotiations continue.

On Friday, Biden administration officials met with the USMX

employer group to directly convey "that they need to be at the

table and negotiating in good faith fairly and quickly" - a

message it had delivered earlier to the ILA.

The USMX has accused the ILA of refusing to negotiate.

Retailers that account for about half of all container

shipping volume, and are headed into their all-important winter

holiday sales season, have been busily employing backup plans.

"There is potential for another violent move across consumer

stocks next week if - as is consensus thinking - the East Coast

Longshoremen do indeed strike," Jefferies analysts said in a

client note.

Many of the big retail players rushed in Halloween and

Christmas merchandise early to avoid any strike-related

disruptions - incurring extra shipping and storage costs.

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.

But a lot of shippers do not have that flexibility as they

are small, do most of their business on the East and Gulf Coasts

or lack the financial might to load up on safety stock.

Ash Bhardwaj, CEO of Onx Homes, has factories in Florida and

imports materials used to build homes in the company's planned

communities through the Port of Miami.

Like other shippers in his position, he was resigned to his

fate. "Everyone will have the same problem," Bhardwaj said.