Source: AFP
Tens of thousands of US dock workers plan to strike next week if there is no progress in contract talks, just a month before November’s closely contested presidential election.
A strike affecting 14 major ports on the Eastern and Gulf Coasts could begin at midnight on Tuesday, October 1, posing a potentially significant headwind to the US economy.
Negotiations for a new contract began in May but have stalled in recent weeks.
The United States Shipping Alliance (USMX), which represents shipping companies and terminal operators, on Thursday asked federal officials to step in, citing the union’s “repeated refusal to come to the table.”
The International Longshoremen’s Association (ILA) dismissed the complaint as “another publicity stunt.”
The union is pushing for protections against automation-related job losses and for big wage increases after dockers continued to provide essential services throughout the pandemic.
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ILA President Harold Daggett dismissed USMX’s “low wage offer” as a “joke,” indicating that employees are poised to walk off the job and follow workers at Boeing, Detroit automakers and elsewhere over the past 18 months that strikes have begun in the tight US labor market
The ILA represents 85,000 workers in 36 ports.
The walkout would be the ILA’s first since 1977. The contract directly affects approximately 25,000 ILA members in 14 major U.S. ports, including New York/New Jersey, Boston, Philadelphia, Savannah, New Orleans and Houston.
But a strike would also affect workers at smaller shipping facilities and terminals along the coast of the eastern half of the United States, from Maine to Texas.
“A strike will cause major disruption to the U.S. economy and the global economy,” said Brent Moritz, a professor of supply chain management at Penn State’s Smeal College of Business.
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The ports to strike accounted for more than half of total US imports in the first seven months of 2024, according to Lloyd’s List.
Oxford Economics estimated that the strike would hit US gross domestic product by $4.5 billion to $7.5 billion per week. The total economic hit depends on the length of the strike, analysts say.
Federal intervention?
Under the Taft-Hartley Act, President Joe Biden has the authority to order the parties to resume talks for an 80-day “cooling off” period.
But Biden, who has embraced organized labor as president, has rejected that option, even as White House officials encourage a resumption of talks.
On Sept. 17, a group of nearly 180 businesses, organizations and trade groups urged Biden to work to ensure there would be no unrest, saying in a letter that a strike “would have a devastating impact on the economy, especially as inflation is on a downward trajectory . trend.”
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Fresh fruit and produce is expected to be among the most affected products.
“You can’t tell a banana to stop growing,” Moritz said of the yellow fruit that will be affected by the disorder.
Automobiles are another industry likely to be heavily affected, with particularly active hubs in Baltimore and Georgia.
Shipping experts expect some goods will continue to arrive at West Coast ports, although capacity is limited and may be more costly.
Air freight is an option, but one that is typically used for luxury goods, pharmaceuticals, or other high-end items.
West Coast ports have averted their own strike in 2023 after a deal between business interests and the International Longshore and Warehouse Union.
The peak shipping season usually starts around June or July, after October. But this year, volumes started to pick up in May and are approaching records in August, said Judah Levine, head of research at Freightos.
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Rates have increased in recent times, partly due to disturbances in the Red Sea.
Shipping rates from Shanghai to New York in July 2024 were about $9,800 per container, up from $2,600 a year earlier, said Levine, who estimated that each day of the strike would lead to about a week of disruption across the chain. supply.
Source: AFP
