Dockworkers across the U.S. East and Gulf coasts have started a major strike, the first of its kind since 1977. This strike has closed many key ports and is expected to seriously impact the country’s economy. The Conference Board says the port strike could cost the U.S. $540 million per day. Others, such as Reuters, say the cost could be as much as $5 billion per day. Everyone agrees that supply chains that rely on these ports to deliver essential goods will be severely disrupted.
The International Longshoremen’s Association (ILA), representing about 85,000 workers, initiated the strike on October 1st. The port strike began after talks with the United States Maritime Alliance (USMX) did not lead to a new contract. As a result, 36 major ports from Maine to Texas have stopped operating, which could lead to significant delays in shipping across the nation.
The Union’s Key Demands
ILA President Harold Daggett has outlined the main demands of the union. The union is asking for a $5 per hour pay raise for each of the six years covered by the new contract. They are also fighting to protect jobs from the threat of automation at ports. They want guarantees that technology will not replace the workers in the years ahead.
In a statement released by the union, Mister Daggett said, “We are now demanding a $5 an hour increase in wages for each of the six years of a new ILA-USMX Master Contract. Plus, we want absolute airtight language that there will be no automation or semi-automation, and we are demanding all Container Royalty monies go to the ILA.”
The union is particularly concerned about automation, which could reduce the need for workers to perform their jobs. The ILA is fighting for stronger language in the new contract to ensure jobs are safe from automation.
The Employer’s Response to the Port Strike
The USMX, which represents terminal operators and ocean carriers, was disappointed by the strike. They had offered a 50% pay increase over six years, as well as better healthcare and retirement options. However, the union rejected this offer, leading to the strike.
In a statement released after the strike began, the USMX said, “We have demonstrated a commitment to doing our part to end the completely avoidable ILA strike. Our current offer of a nearly 50% wage increase exceeds every other recent union settlement, while addressing inflation, and recognizing the ILA’s hard work to keep the global economy running.”
Despite these negotiations, the strike is continuing as both sides remain firm in their positions. Daggett and the ILA have placed the blame for the strike on the employers, accusing them of refusing to fairly compensate American workers while profiting from foreign-owned shipping companies.
Economic Consequences of the Port Strike
The economic effects of the strike could be huge, especially if it continues for a long period of time. The ports that have been shut down handle a large portion of the nation’s imports and exports. Goods such from coffee to medical supplies to auto parts pass through these ports regularly. The absence of these goods could, and would, slow down supply chains.
The Owner-Operator Independent Drivers Association (OOIDA), which represents truck drivers, also commented on the strike. In a statement, OOIDA President Todd Spencer said that truck drivers often feel the impact of strikes and other disruptions in the supply chain. Spencer called for a quick resolution and highlighted the broader issue of how supply chain inefficiencies hurt truck drivers.
Government Response
So far, the federal government has not stepped in to stop the strike. President Joe Biden has said that his administration will not use the Taft-Hartley Act to intervene. This law allows the president to step in during strikes that could hurt the nation’s safety or health, but it has not been used in this case.
In the past, this law has been used in major strikes, such as in 2002 when President George W. Bush intervened in a similar strike on the West Coast. However, for now, the federal government is staying out of the situation, leaving the two sides to continue negotiations on their own.
What Comes Next?
The outcome of the strike remains uncertain, but the longer it continues, the greater the potential for damage to the U.S. economy. Freight companies and other businesses are already feeling the effects, and some industries are starting to worry about long-term impacts.
Companies like Trailer Bridge, which operates out of Jacksonville, have activated contingency plans to keep their operations running. “Our port team is activating our contingency plan now and our Jacksonville port is already fully operational,” said Mitch Luciano, the company’s CEO, in a Facebook post.
For now, all eyes are on the ongoing negotiations between the ILA and USMX. If an agreement is reached soon, the economic impact could be minimal. However, a prolonged strike could lead to greater disruptions, affecting supply chains and the broader economy in ways that will take months to recover from.
