Contract discussions broke off abruptly on Dec. 18, 2012, between the International Longshoremen’s Association (ILA) and the United States Maritime Alliance (USMX), A.N. Deringer Inc. is reporting in a trade alert.

The Dec. 18 negotiations were part of a last-minute effort to reach a compromise between the parties over a contract that has already been extended once for 90 days and now expires on Dec. 29, 2012.

One of the last sticking points is regarding container royalties. The ILA stated they would postpone the strike until Feb. 1, 2013, if USMX would agree to take the topic off the table. When USMX refused, the talks abruptly ended, which puts the ILA on course for a Dec. 29 strike, says Deringer in a statement.

Deringer goes on to explain that "If an ILA strike occurs, it will effectively shut down ports along the East and Gulf Coasts of the U.S. With those ports shut down, Canadian and US West Coast ports will be backlogged with overflow cargo, as well as shipments subject to Force Majeure. Carriers are also threatening additional surcharges."