Strike poised to close major US ports

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A dock workers' strike is poised to indefinitely close ports across much of the United States, threatening significant business and economic disruption ahead of the presidential election and the busy holiday shopping season.

Tens of thousands of members of the International Longshore Association (ILA) are preparing to protest Tuesday at 14 major ports along the Eastern and Gulf coasts, disrupting container traffic from Maine to Texas.

Barring a last-minute intervention, this action will mark the first shutdown in nearly 50 years.

President Joe Biden has the authority to suspend the strike for 80 days to continue negotiations, but the White House has said he has no plans to take action.

What is the strike about?

The two sides are vying for a six-year master contract that covers about 25,000 port workers employed in container and roll-on/roll-off operations, according to the American Maritime Alliance, known as USMX, which represents shipping companies, port associations and maritime terminal operators.

Negotiations have been stalled for months and the current contract between the parties expires on Monday.

Union boss Harold Daggett has called for significant pay rises for his members, while expressing concerns about threats from automation.

USMX accused the union of refusing to negotiate and filed a complaint with labor regulators asking them to order the union back to the table.

Under the previous contract, starting pay ranged between $20 and $39 an hour, depending on the worker's experience. Workers also benefit from other benefits, such as bonuses linked to the container trade.

Daggett said the union wants to see the hourly wage increase by five dollars a year over the life of the six-year agreement, which he said amounts to about 10 percent a year.

The ILA said workers were owed a debt after profits at shipping companies soared during the Covid pandemic, while inflation hit wages. It warned to expect a broader strike by its members, including those not directly involved in this dispute, although the exact figures are not clear.

The union said it represents more than 85,000 people; it claimed approximately 47,000 active members in its annual report to the Ministry of Labor.

Which items will be affected by the strike?

Urgent imports, such as food products, will likely be among the most affected goods.

Affected ports handle about 14% of agricultural exports shipped by sea and more than half of imports, including a significant portion of the banana and chocolate trade, according to the Farm Bureau.

Other sectors exposed to disruption include tin, tobacco and nicotine, Oxford Economics said. Clothing and shoe companies and European automakers, which route much of their shipments through the Port of Baltimore, will also be affected.

U.S. imports surged over the summer as many companies took steps to speed up shipments ahead of the strike.

“I don't think we'll see immediate, significant economic impacts…but as the weeks go by, if the strike lasts that long, we may start to see prices increase and there will be shortages of goods,” said Seth Harris, professor at Northeastern University and former White House adviser on labor issues.

What will be the economic impact?

More than a third of exports and imports could be affected by the strike, affecting U.S. economic growth by at least $4.5 billion each week of the strike, according to Grace Zemmer, associate U.S. economist at Oxford Economics. although others estimated the economic shock could be greater.

She said more than 100,000 people could be left temporarily out of work as the impact of the shutdown spreads.

“This is very much a trigger event, which will cause the dominoes to fall over the next few months,” said Peter Sand, chief analyst at maritime freight analytics firm Xeneta, warning that the standoff could also increase transport costs.

That would affect consumers and businesses that tend to rely on so-called “just-in-time” supply chains for goods, he added.

How could this affect the US elections?

This impasse injects uncertainty into the American economy at a delicate time.

The economy is slowing and the unemployment rate is rising as the U.S. election approaches in six weeks.

The strike risks putting President Biden in a difficult situation.

U.S. presidents can intervene in labor disputes that threaten national security by imposing an 80-day cooling-off period, thereby forcing workers to return to their jobs while negotiations continue.

In 2002, Republican President George W. Bush intervened to open the ports after an 11-day strike by West Coast dockworkers.

The U.S. Chamber of Commerce business group called on President Biden to take action.

“Americans have experienced the pain of delays and shortages of goods during pandemic-era supply chain backlogs in 2021. It would be unconscionable to allow a contract dispute to inflict such a shock on our economy ” said Suzanne P. Clark, President and CEO. manager of the group of companies.

The ILA's Mr. Daggett supported Democrat Biden in 2020 but has criticized the president more recently, citing pressure on West Coast dockworkers to reach a deal a year ago. He met with Donald Trump in July.

Although any strike chaos is likely to hurt Democrats, the cost of alienating labor movement allies just weeks before the election would be higher, said William Brucher, a professor of social studies and labor relations at Rutgers University.

But public support for the strikes could be tested by the conflict, championed by Mr. Daggett, who was acquitted of ties to organized crime in a 2004 case by federal prosecutors. A related civil action remains unresolved.

Films such as the 1954 classic On the Waterfront once defined the image of the dockers' union, but Professor Brucher said he believed historical memory had largely faded and many people shared the dockworkers' concerns about cost of living and automation.

“As much as it might sway public opinion against the ILA, a strike by ILA members is their decision and I don't think they will be swayed by public opinion in any significant way,” he said. he declared.

“What is more likely is that the pressure of a strike will likely force employers back to the table with a much more substantial offer.”

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