A labor dispute has shut down one of America's busiest ports.

More than 1,000 union dock workers in New York City walked off the job Friday, halting business at the Port Authority of New York and New Jersey shipping terminals. The bi-state agency operates a vast complex of terminals in Newark, Elizabeth, Brooklyn and Staten Island and rents those facilities to 40 different shippers.

In a statement, the Port Authority confirmed the walkout and asked members of the International Longshoremen Association (ILA) to return to work. "As the agency that oversees the largest port complex on the East Coast, we strongly urge the ILA members to return to work immediately and resolve their differences after they return," the agency wrote. "In the meantime, Port Authority Police are actively working to ensure public safety for all of the stakeholders at the port."

A spokesperson for the New York Shippers Association (NYSA), which represents the port's shipping companies, told CBS MoneyWatch the group believes the job action constitutes an "illegal strike" because the ILA is operating under a current and binding contract.

The ILA, headquartered in North Bergen, New Jersey, did not answer the phone. A spokesman for the group told Bloomberg News that workers were striking over what they perceive as interference by the Waterfront Commission in the collective bargaining agreement between the ILA and NYSA. The Waterfront Commission was created in the 1950s to fight crime.

"I am told the last time something like this happened was back in 2010," Beverly Fedorko, the NYSA's spokesperson, said.

The Port of New York and New Jersey is the busiest on the East Coast, ranking third nationally after the ports of Los Angeles and Long Beach, California. Sources close to Port operations, who were not cleared to comment for the media, said the biggest immediate logistical issue was working with the terminal operators to get trucks that were trapped in the terminals out of the facility.

According to the last available data from 2014, the Port of New York and New Jersey handled 73.6 million metric tons of freight with 18.1 million metric tons coming in as imports and 55.5 million metric tons going out as exports. That same year the port handled close to 650,000 cars, with 272,000 leaving as exports and 368,000 coming in from overseas.

The Port of New York and New Jersey handles about $200 billion worth of cargo annually. In the era of real-time delivery, where companies strive to keep inventory levels as low as possible, a protracted shipping delay can hurt business.

In 2012, a federal mediator had to be brought in to help the ILA and the NYSA reach a contract settlement. The union had voted that year to strike, but members stayed on the job. At issue in that protracted negotiation was the continued payment of royalties for every container handled in the port.

Across the industry, a move to replace union labor with machines has been a major sticking point between labor and management. Unionized dock workers are some of the highest-paid hourly wage employees in the country, reaching the high five figures, or higher, depending on seniority and overtime.

 Employers Seek to End ILA Strike at NY-NJ Port

Joseph Bonney, Senior Editor | Jan 29, 2016 11:06AM EST

JOC.com

Employers are moving to force the International Longshoremen's Association to end a strike that blindsided container terminal operators and halted cargo handling Friday at the East Coast's busiest port.

The port-wide walkout began at 10 a.m. There was no official confirmation of the cause, but multiple union sources said it was aimed primarily at the Waterfront Commission of New York Harbor, which regulates hiring in the port.

ILA spokesman James McNamara confirmed that the walkout "seems to be directed at the Waterfront Commission and its interference in hiring and harassment of ILA members." He said dockworkers also cited concerns about chassis jurisdiction and technology.

John Nardi, president of the New York Shipping Association, said employers were mystified. "We have absolutely no indication what the reason is for this action," he told JOC.com.

Although the ILA and NYSA have been at odds with the Waterfront Commission for years, Nardi said he was unaware of any current development that would have triggered Friday's strike.

Nardi said the NYSA had called for a 3 p.m. emergency meeting of the NYSA-ILA contract board to seek a determination that the strike is illegal. The board is divided equally between NYSA and ILA representatives.

Assuming the board deadlocks, Nardi said, the NYSA will seek immediate arbitration and a back-to-work injunction.

The ILA walkout came as New York-New Jersey terminals are struggling to catch up after a four-day weekend shutdown from Winter Storm Jonas, and a three-day holiday the previous weekend for the observance of Martin Luther King Jr. Day.

The Port Authority of New York and New Jersey, which leases property to the container terminals that belong to the NYSA, urged the union to return to work.

"As the agency that oversees the largest port complex on the East Coast, we strongly urge the ILA members to return to work immediately and resolve their differences after they return. In the meantime, port authority police are actively working to ensure public safety for all of the stakeholders at the port," the port authority said in a statement.

When word of Friday's strike spread, trucking company dispatchers advised drivers to avoid joining queues outside terminals. The port authority issued a similar request.

Truck traffic was heavy at terminals when the walkout started. More than two hours later, trucks were still queued up outside terminals. Some drivers waited on side streets near the port hoping the work stoppage would be short-lived.

At the APM Terminals gate at Port Elizabeth, more than 100 ILA members milled around, waiting to see whether they would be called back to work.

Several said they didn't know what the work stoppage was about, but had been told to walk out at 10 a.m. "All that I know is it's cold," one heavily bundled dockworker said.

Contact Joseph Bonney at joseph.bonney@ihs.com and follow him on Twitter: @JosephBonney.