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U.S. ports brace for July 1 dockworker contract expiration

Yahoo Finance reporter Dani Romero outlines the likelihood of a dockworker strike between U.S. ports as negotiations continue ahead of their contract's July 1 expiration.

Video transcript

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DAVE BRIGGS: Businesses throughout the US continue to feel the economic impacts of the increasingly fractured supply chain. Now, a new concern facing the US could compound some challenges ahead, as unionized dockworkers and the shipping operators out on the West Coast ports negotiate a new contract. For more on this, we have Yahoo Finance's Dani Romero with us. Dani, this could be a disaster if, in fact, we see a strike.

DANI ROMERO: Yeah, it's still unclear how long these negotiation talks will really last. But one thing is for sure is that both the unionized dockworkers, as well as the shipping operators, they said that they're really not going to make that deal by tomorrow, July 1. And so-- but they also reaffirmed that it's unlikely that they would have a strike or a lockout. A full statement they sent earlier this month that says the parties remain focused on and committed to reaching an agreement. So they are really reaffirming that.

But the stakes are really high. Like you said, the future of the global supply chain really relies on this new contract that really-- that started back on May 10. And last November, the unionized dockworkers actually rejected PMA's offer for an extension on their current contract that would last until July of 2023. But there is a possibility that both parties could agree on a short-term extension of their current contract that would actually preserve their current deals, no stoppage, which would allow them to continue to negotiate as well.

The executive director of the Port of Los Angeles says that he's not expecting a strike or a lockout. But again, the key-- the timing is really key here. July and August are really busy months for Asia. We-- retailers are stocking up right now with back-to-school supplies, as well as holiday goods. Some experts are even expecting that the supply chain performance could actually worsen. And destocking could happen again.

DAVE BRIGGS: Great to hear that a strike is not likely. That would be epic. All right, Dani Romero, thanks so much. Great information for us. Thank you.

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