A major maritime workers strike is looming, and it could mean a shutdown of key goods — from cars to food — across the East and Gulf Coasts.
The International Longshoreman’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, primarily higher wages, are not met.
“A sleeping giant is ready to roar on Tuesday, October 1, 2024, if a new Master Contract Agreement is not in place,” ILA President Harold Daggett said in a statement.
According to an ILA press release, the union wrote in a letter to its membership that its workers, who primarily work on shipping docks to load, unload, and inspect cargo and operate heavy machinery, are “struggling to pay their mortgages and rent, car payments, groceries, utility bills, taxes, and in some cases, their children’s education,” emphasizing the need for boosted pay in its upcoming contract.
A strike would have widespread implications across the US, with significant shipment delays that could set off a chain reaction of disruptions.
“A prolonged strike could lead to weeks, or possibly months, of shipping delays and backlogs, worsened 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 stoppage.”
According to the National Association of Manufacturers, over half of imports and exports come through the East and Gulf Coast ports, handling pharmaceuticals, vehicles, and retail, among other things, and generating an average of over $2.1 billion each day. Depending on the length of the strike, supply-chain disruptions could also lead to price hikes for consumers.
The United States Maritime Alliance, which represents the companies that employ longshoremen, said on September 23 that despite attempts to resume bargaining with the ILA they “have been unable to schedule a meeting to continue negotiations.”
“Our goal remains the same — we want to bargain and avoid a strike, but time is running out if the ILA is unwilling to return to the table,” USMX added. In a Monday statement, ILA said that the sides had communicated multiple times in the past weeks but that a stalemate remains in place over wage offers.
A strike could delay shipments and trigger price hikes
If the union strikes, all industries will be impacted — but time-sensitive industries, like cars or pharmaceuticals, would face severe disruptions right off the bat, 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 Authority of New York and New Jersey, operators are trying to bring in “as many ships as possible” ahead of a potential strike, director Bethann Rooney said in a press conference. That includes encouraging the shippers to get as much cargo out as “humanly possible” and as quickly as possible.
The retail industry could also face disruptions from the strike.
“Many retailers have already taken steps to mitigate the potential impact of a strike by bringing in products earlier or shifting products to the West Coast,” Jonathan Gold, the National Retail Federation’s vice president of supply chain and customs policy, 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 would likely not arrive on time: “Manufacturers might not receive parts, materials and supplies needed for production, which will lead to assembly lines shutting down. And farmers won’t be able to get their products to overseas markets, which could lead to lost sales.”
The port of New York and New Jersey ranks fourth among the country’s top 25 ports for total tonnage, according to data from the Bureau of Transportation Statistics. An analysis by the nonprofit research group Mitre found that the strike would have a significant economic impact on ports in New York and New Jersey, with a daily loss of around $640 million.
“We are coordinating with partners across the supply chain to prepare for any potential impacts,” Steve Burns, a PANYNJ spokesperson, told BI. “For the over 600,000 regional jobs our port supports and the $240 billion in goods moved through here each year, we urge both sides to find common ground and keep the cargo flowing for the good of the national economy.”
Grace Zwemmer, associate US economist with Oxford Economics, wrote in an early September note that it would likely take four to seven days to clear up the backlog from each day the strike continues, “meaning even a two-week strike could disrupt supply chains until 2025.” She referred to estimates from Sea-Intelligence, which predicted that a strike would prevent 74,000 shipping containers from being unloaded each day. Additionally, she wrote that the strike would mean it would take longer for manufacturers to receive goods, which would, in turn, jack 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 harm both the economy and consumers.
“A strike at this point in time would have a devastating impact on the economy, especially as inflation is on the downward trend,” the trade organizations wrote.
Some ports have already begun prepping guidance for customers should the union go on strike — the Port of Houston wrote in a memo that it would be extending its gate hours leading up to the strike to allow more time for the transport of goods, with other ports also scrambling to unload shipments in anticipation of the strike.
“Throughout the pandemic, Longshore workers never took a day off,” ILA Executive Vice President Dennis Daggett said on September 20. “We ensured the shelves were stocked and the supply chains stayed strong, even as we lost far too many of our own. Now, we need the public’s support. The very corporations that profited off our hard work refuse to share those profits with the workers who make them possible.”
