At midnight ET, tens of thousands of longshoremen went on strike, closing important ports on the East and Gulf coasts and obstructing the delivery of goods ranging from food to auto parts.
With the holiday shopping season now approaching, businesses and logistics companies took proactive measures to mitigate the damage, so consumers are unlikely to suffer unless a walkout lasts for several weeks. However, experts and industry associations estimate that a work stoppage could still cost the US economy between several hundred million and $4.5 billion a day. Redirecting commodities via longer routes would incur costs that would be borne by the consumers.
About half of the US’s ocean imports are handled by the ports. According to differing estimates, between 25,000 and 50,000 International Longshoremen’s Association members are involved in the strike. The ILA has 85,000 members overall. Union officials contend that large international freight carriers have made enormous profits since supply-chain hiccups during the pandemic drove up freight rates, and they claim that workers have not been fairly compensated for these gains.
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Harold J. Daggett addressed union workers at Maher Terminals in Elizabeth, New Jersey, in a video that was uploaded to an ILA Instagram account.
“This is going down in history what we’re doing here,” he stated.
He said, “They can’t live for too long.”
The United States Maritime Alliance, or USMX, which represents significant ocean freight and port companies, and the union have been at odds for months. The strike puts an end to their acrimonious exchanges. The union wants restrictions on automation at ports that it claims could result in job losses in addition to pay increases. In the days preceding the possible shutdown, there had been no negotiations between the parties.
In a statement released on Monday, the union stated, “The Ocean Carriers represented by USMX want to enjoy rich billion-dollar profits that they are making in 2024, while they offer ILA Longshore Workers an unacceptable wage package that we reject.”
Meanwhile, the USMX stated that it had been in talks with the union about trade offers and had wanted to prevent a work stoppage.
According to a press release, “Our offer would retain the current language around automation and semi-automation, strengthen our health care options, triple employer contributions to employee retirement plans, and increase wages by nearly 50%.”
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When it became evident that a stoppage could begin on Tuesday, a number of companies placed advance orders for items in preparation for the strike. However, analysts anticipate more severe consequences if the walkout lasts for many weeks or longer. In recent days, trucking and other logistics firms have been in a rush to transfer as much cargo out of ports ahead of any possible strike.
With over 4,500 employees, the large port operations in New York and New Jersey are expected to be most impacted. In a press release, Governor Kathy Hochul of New York stated that while she encouraged the parties to reach a resolution, plans had been taken to keep the shelves filled.
“In preparation for this moment, New York has been working around the clock to ensure that our grocery stores and medical facilities have the essential products they need,” she stated. “It is imperative that USMX and the ILA quickly come to a just deal that upholds worker rights and maintains the flow of trade through our ports. We will keep working to cause as little interruption as possible for New Yorkers in the interim.”
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The U.S. Chamber of Commerce and other business associations have pushed President Joe Biden to use the 1947 Taft-Hartley Act to get involved. With that power, Biden could ask for a “80-day cooling-off” period, which would compel dockworkers to continue working.
Though the White House has recently communicated with the USMX and the ILA, Biden has stated he has no intention of using the statute. Thirty-five days before Election Day, Democratic Vice President Kamala Harris is trying to leverage her union support against Republican former President Donald Trump; an intervention could further sour relations with organized labor.
“I don’t believe in Taft-Hartley because it’s collective bargaining,” Biden said to reporters on Sunday.
Tuesday, Biden encouraged USMX to raise worker wages to match executive compensation and asked for the continuation of negotiations.
“It is time for USMX to negotiate a fair contract with the longshoremen that reflects the substantial contribution they’ve been making to our economic comeback,” Biden stated in a statement.
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