Dockworkers on the U.S. East and Gulf Coast may strike unless a contract is reached by September 30.

Talks between the dockworker’s union, the International Longshoremen’s Association (ILA), and port owners, represented by the United States Maritime Alliance (USMX), broke down since June with no new talks scheduled. Both sides remain at an impasse over wages and automation.

A strike would affect 60% of U.S. container volumes, worth $588 billion in annualized trade value. Some shippers have diverted cargo to other ports to avoid the strike’s impact. However, significant volumes of cargo are still bound for the U.S. East and Gulf Coasts that cannot be diverted.

Unlike past negotiations where carriers usually conceded to keep goods moving, the USMX appears firm in its stance this time round. The potential strike comes at a sensitive time politically, with federal agencies aware of the possible economic fallout just before the November 5 presidential election.

Source: Journal of Commerce