Some 45,000 dockworkers in the US have gone on strike at ports on both west and east coasts, threatening to disrupt global supply chains in the run-up to the crucial Christmas period.
The BBC reports members of the International Longshoremen’s Association (ILA) have started the walkout following the expiry of contracts yesterday (30 September). The union is reported to have 85,000 members and around 47,000 active members.
The ILA’s talks with the United States Maritime Alliance (USMX), which represents container carriers and port associations, had failed to produce a new deal on pay by the midnight deadline.
Pay dispute
Ports across the east and gulf coasts of the US have been affected, and it marks the first port strike on the east coast of the country since 1977.
The ILA and USMX have both accused the other of refusing to reasonably negotiate – ILA president Harold Daggett has demanded significant pay increases, while USMX says it has already offered a 50% wage bump.
Daggett has said the union wants to see a $5 increase in the per-hour pay of dock workers annually over the course of the six-year contract currently tabled, and the ILA argues that workers have seen little of the increased profits garnered by shipping firms since the Covid-19 pandemic.
Disruption
USA Today notes recent JPMorgan analysis, which found that the strikes could cost the US economy over US$5bn a day, hitting around a half of all US exports at a total of 36 ports. There are also fears that this could have a knock-on effect on shipping costs, exacerbating existing issues in the sector following the Red Sea crisis and other disruptions.
The US government has said that, despite presidential powers to suspend the strikes for 80 days, it will not act to prevent the strikes.
Imports already saw a boost to the US during the summer months in anticipation of increased costs due to the strikes. There are longer-term fears too over how the strikes could hit consumers, Northeastern University professor and a former White House adviser on labour issues Seth Harris told the BBC:
"I don't think we will see immediate, significant economic impacts...but over the course of weeks, if the strike lasts that long, we can begin to see prices rise and for there to be some shortages in goods.”
The Chartered Institute perspective
The director general of the Chartered Institute of Export & International Trade, Marco Forgione, said that the strikes would also affect the UK and EU, as goods exported to these markets could now be subject to “additional costs and additional fees levied by the shipping companies”. The recovery from disruption and port backlogs could take months, he added.
“Global supply chains have been impacted and buffeted by a huge number of events recently, with the drought affecting the Panama Canal, conflict in the Red Sea with the Houthi attacks and a whole range of unexpected events.
“The Baltimore bridge was hit and collapsed, and last week, there was a fire that shut down four of the container terminals at the Los Angeles port, the biggest port in the US, because of a fire in a truck carrying lithium-ion batteries.
“What that disruption has meant is that the key retailers have brought forward their supply chain. There’s always normally a quiet period, but over the summer has been a really busy period of products being moved in advance of the potential strike, but also to deal with that ongoing instability and uncertainty in the global supply chain.”
