by - The International Longshoremen’s Association plans to strike on Tuesday after wage negotiations stalled.
- The strike would affect the import and export of goods in most sectors, from retail to automobiles.
- A strike lasting just two weeks could disrupt supply chains until 2025, an expert says.
A major strike by maritime workers will begin on Tuesday, meaning a likely slowdown in imports and exports of key goods – from cars to food – in the east and Gulf coasts.
The International Longshoremen’s Association, the largest union of maritime workers in the US, announced last week that it was prepared to strike on October 1 if demands in their union contract, especially higher wages, are not met. On Sunday, the union announced that the strike will go ahead as planned after contract negotiations stalled.
“United States Maritime Alliance (USMX) refuses to address a half-century of wage suppression in which Ocean Carriers’ profits skyrocketed from millions to mega-billion dollars while ILA wages on the Long Coast remained flat,” the union said in a statement. a statement on Facebook. “The unity of the ILA remains strong and growing.”
The planned strike would involve 85,000 members of the International Longshoremen’s Association, as well as “tens of thousands of longshoremen and maritime workers around the world,” the union’s statement said, calling out all Atlantic and Gulf Coast ports from Maine to Texas affected.
According to a press release from the ILA, the union wrote in a letter to its members that its employees, who work primarily at ship docks to load, unload and inspect cargo and operate heavy machinery, “struggle to pay their mortgages and rent, car payments, groceries, utility bills, taxes and in some cases their children’s education,” highlighting the need for higher wages in the coming contract.
If the strike occurs, it will have widespread impacts across the US, with significant shipping delays that could cause a chain reaction of disruptions. It would be the first coastal strike by ILA members since 1977, Reuters reported.
“A prolonged strike could lead to weeks or possibly even months of shipping delays and backlogs, exacerbated by limited rerouting options, high costs and time constraints,” Abe Eshkenazi, CEO of the Association for Supply Chain Management, told BI. “The supply chain is inextricably linked, and as we enter the busiest shopping season of the year, businesses, retailers and consumers alike will feel the impact of a strike.”
According to the National Association of Manufacturers, more than half of imports and exports come through East Coast and Gulf Coast ports, which handle pharmaceuticals, vehicles and retail trade, among other things, generating an average of more than $2.1 billion daily. Depending on the duration of the strike, supply chain disruptions could also lead to price increases for consumers.
The United States Maritime Alliance, which represents companies that employ longshoremen, said on September 23 that despite efforts to continue negotiations with the ILA they “failed to schedule a meeting to continue negotiations.”
“Our goal remains the same: we want to negotiate and avoid a strike, but time is running out if the ILA is not willing to return to the table,” USMX added. In a statement on Monday, ILA said the parties had communicated several times in recent weeks but there was still a standoff over wage offers.
A strike can delay shipments and cause price increases
If the union strikes, all sectors will be affected — but time-sensitive industries, such as autos and pharmaceuticals, would immediately face serious disruptions, Mia Ginter, director of ocean export products and transportation company CH Robinson, wrote in an August blog post.
“Many auto parts and components are imported through the East Coast, so the risk of production delays would be high,” Ginter said.
At the Port Authorities of New York and New Jersey, operators are trying to bring in “as many ships as possible” ahead of a possible strike, Director Bethann Rooney said at a news conference. That includes encouraging shippers to move as much freight as “humanly possible” and as quickly as possible.
The retail sector could also face disruptions due to the strike.
“Many retailers have already taken steps to mitigate the potential impact of a strike by bringing in products early or moving products to the West Coast,” Jonathan Gold, vice president of supply chain and customs policy for the National Retail Federation, told BI. “The global supply chain is a complex system and even a minor disruption would have a negative impact and cause delays at a critical time for both retailers and consumers.”
Gold wrote in early September that holiday shipments were unlikely to arrive on time: “Manufacturers may not receive the parts, materials and supplies needed for production, which will result in assembly lines being shut down. And farmers won’t be able to get their products to the factory. overseas markets, which could lead to loss of sales.”
According to data from the Bureau of Transportation Statistics, the Port of New York and New Jersey ranks fourth among the nation’s top 25 ports in total tonnage. An analysis by the nonprofit research group Miter found that the strike would have a significant economic impact on the ports in New York and New Jersey, with daily losses of about $640 million.
“We are coordinating with partners throughout the supply chain to prepare for potential impacts,” Steve Burns, a spokesperson for PANYNJ, told BI. “For the more than 600,000 regional jobs our port supports and the $240 billion in goods moved here annually, we urge both sides to find common ground and maintain the flow of cargo for the good of the national economy.”
Grace Zwemmer, US economist at Oxford Economics, wrote in a note in early September that it would likely take four to seven days to clear the backlog from each day the strike continues, “meaning that even a two-week strike could disrupt supply chains could disrupt until 2025.” She referred to estimates from Sea-Intelligence, which predicted that a strike would prevent 74,000 shipping containers from being unloaded every day. Furthermore, she wrote that the strike would mean it would take longer for manufacturers to receive goods, which in turn would drive up prices for consumers.
Meanwhile, trade groups have called on the Biden administration to step in and help negotiate a deal — or at least ensure negotiations continue instead of a strike. They warned that a labor stoppage could hurt both the economy and consumers.
“A strike at this time would have a devastating impact on the economy, especially as inflation is on a downward trend,” the trade bodies wrote.
Some ports have already begun preparing guidelines for customers if the union strikes — the Port of Houston wrote in a memo that it would extend gate hours in the lead-up to the strike to allow more time for transit of goods, just like other ports. also busy unloading shipments in anticipation of the strike.
“Throughout the pandemic, Longshore employees never took a day off,” ILA Executive Vice President Dennis Daggett said on September 20. “We kept shelves stocked and supply chains strong, even as we lost far too much of our own produce. Now we need the public’s support. The very companies that have benefited from our hard work refuse to share those profits with the workers who make them possible.”