Off-loaded shipping containers

PORT OF NEW YORK/NEW JERSEY- Industrial real estate specialists say the region avoided a sharp curve heading into the end of the year, even if the fiscal “cliff” still looms. On Friday afternoon, a dock workers’ planned strike that would have shut down 14 East Coast and Gulf ports was averted with a last-minute extension of talks.

The International Longshoremen’s Association and the United States Maritime Alliance agreed to take until Jan. 28 to resolve their differences over a new contract, instead of union members walking out on Sunday, just before the federal “fiscal cliff” is slated to occur unless politicians hammer out a last-minute deal.

Many believe the U.S. dock workers’ union could still strike, and predict that would rain hurt on struggling retailers and manufacturing in the eastern half of the country.

“I think it could still happen,” CBRE’s William R. Waxman tells GlobeSt.com “I think people are prepared for a short amount of time by having brought in extra product. Companies may be somewhat prepared for a longer period of time, since some of their shippers took care to diversify the use of ports after the last shut-down, ten years ago.”

There have already been reports of companies – Target Corp. is one – making alternative plans in case the strike occurs.

“If a shutdown goes beyond a week, though,” says Waxman, an executive vice-president with his company, “it would be a huge issue, for all parties involved and the economy in general.”

Unloading of shipping containers would abruptly cease at 14 ports from the East Coast to the Gulf of Mexico if the 14,000 unionized longshoremen go out all at once.  The Port of New York and New Jersey, the second-busiest in the country, has more than 3,200 workers who would be part of a walkout, occurring only months after the Port closed for six days in the aftermath of Oct. 29th‘s Hurricane Sandy. 

In the event of a strike, longshoreman handle only military cargo, mail, and non-containerized items like cars.

“The only bright side is that the Port of New York/New Jersey is not being singled out,” says Michael McGuiness, executive director of NAIOP, the commercial real estate organization, in New Jersey. “We will not be losing jobs or business to sister ports south or north of here.”

“What we have to do is hope that perhaps we have somebody in Washington who will intervene, key people who will intervene to save some of those folks who are going to be in trouble” if the strike does occur.

The president has the power to order workers back to the job for a “cooling-off” period if a contract dispute threatens the national economy or security, as George W. Bush did during the lockout of union workers at West Coast ports in 2002. Economists have estimated that each day of that lockout cost the U.S. economy $1 billion.

This week, after the National Retail Federation called on President Barack Obama to use any possible means to block the strike, he put pressure on dockworkers and shipping companies to find a way to agree on a contract extension, so that at least it would not occur in concert with the “fiscal cliff.” Democrats and Republicans have only a few days to agree on a deal that would thwart automatic tax hikes and severe cuts in federal spending taking effect as of Jan. 2.

The contract between the International Longshoremen’s Association and the U.S. Maritime Alliance – which represents shipping and terminal operators and port associations – had already been extended once for 90 days.

One key issue stalling progress was a dispute over the royalties paid to the dockworkers for each container they unload. George H. Cohen, director of the Federal Mediation and Conciliation Service that mediated the talks, said Friday that an agreement had been reached on the matter.

“While some significant issues remain in contention, I am cautiously optimistic that they can be resolved in the upcoming 30-day extension period,” the mediator said.