Mayor US port workers strike halts half of ocean trade
Make us a preferred source
Make us a preferred source on Google
The news: American port workers on the East and Gulf coasts launched their first major strike in nearly 50 years on Tuesday, freezing nearly half of the nation’s ocean shipping after negotiations over wages and port automation broke down.
The numbers: Dockworkers from the International Longshoremen's Association (ILA) launched their first major strike since 1977 after rejecting a final offer from the United States Maritime Alliance (USMX) that included a near 50% wage increase over the life of a new 6-year contract.
That fell well short of the union’s demands, which included pay rises of as much as 77% for longshoremen at the top rate, over the life of the contract, according to The New York Times.
Another crucial point of contention is the ILA's demand for guarantees against port automation projects. The ILA’s resistance to technology isn't new—it walked away from talks in June after a port in Alabama used automation technology to check trucks that was not authorised under its labour contract.
The previous contract, which expired on Monday, allowed “semi-automated” tech but banned equipment “devoid of human interaction.” The Maritime Alliance offered to maintain that restriction, but the ILA is demanding stronger protections to safeguard jobs.
The strike affects 36 ports on the East and Gulf coasts, through which approximately 60% of the nation’s container shipments pass.
That includes the Port of New York and New Jersey, the country’s third busiest, and the shipment of cars and heavy machinery through the Port of Baltimore, along with rapidly expanding ports in Virginia, Georgia and Texas.
It is expected to cost the US economy up to USD5 billion a day, according to Reuters.
The context: The strike has halted shipments of goods ranging from food to cars and personal items across ports. Among companies most impacted are Walmart, Ikea, Samsung, LG, Home Depot and Hyundai, according to CNBC.
Retailers have implemented contingency plans, but trade experts warn that while a brief stoppage might cause minimal impact, a prolonged strike could result in shortages, rising prices and even layoffs.
Only five weeks ahead of the November election, the situation also puts President Joe Biden in a delicate political position. Biden has so far refused to intervene, but some experts believe he might eventually have to use a federal labour law to force an end to the port shutdown.
What they said: "We are prepared to fight as long as necessary, to stay out on strike for whatever period of time it takes, to get the wages and protections against automation our ILA members deserve," LA's leader, Harold Daggett, said Tuesday. "USMX owns this strike now. They now must meet our demands for this strike to end."
"We expect the strike itself to last for five to seven days until a government intervention... but the ripple effect is likely to be felt across the whole network into Europe, into Asia for at least into January, February," Peter Sand, an analyst at shipping pricing platform Xeneta told Reuters.
