What a lengthy strike at US ports could mean for global supply chains

A container ship leaves the Port of Newark for the Atlantic Ocean on September 30, 2024, as seen from New York.

Spencer Platt | Getty Images News | Getty Images

A massive strike by dockworkers at US East Coast and Gulf Coast seaports is expected to have dire consequences for global supply chains and the economy, with US consumers likely to notice shortages of popular products if the work stoppage lasts a long time.

Workers at ports stretching from Maine to Texas went on strike Tuesday morning in a dispute over wages and automation. The action, which risks having serious consequences for ships carrying billions of dollars of goods, is the first taken by the International Longshoremen's Association, or ILA, union in nearly half a century.

The ILA, which represents about 45,000 port workers, made good on its strike threat at 14 major ports after negotiations with the employers group United States Maritime Alliance, or USMX, failed before a deadline of 30 september.

“The takeaway here is that duration amplifies impact,” Lisa DeNight, managing director of national industrial research at Newmark, told CNBC's “The Exchange” on Monday.

“If this strike lasts a few days, the implications will be, well, rather short-lived, I would say. If this continues, it will have cascading impacts on the entire global economy, not just the economy “So the unpredictability of this problem is really at play and it's of such magnitude that it can really put a giant damper on global supply chains,” she added.

DeNight said even a minor disruption of just a few days could have “very significant implications for certain industries,” including pharmaceuticals, automotive and manufacturing.

Supply chain crises

Maritime supply chains have already been hit hard this year by the Red Sea conflict, a long drought affecting the Panama Canal and the collapse of the Baltimore Bridge.

Nonetheless, Peter Sand, chief analyst at ocean freight rate intelligence platform East and Gulf, “the stakes couldn't be higher. “

Speaking to CNBC's “Street Signs Europe” on Tuesday, Sand said he expects the strike to last a week.

“We're now seeing the dominoes fall in several stages. Initially, of course, the immediate effect is felt on the East Coast of the United States and the Gulf Coast, right?” Sable said.

There will then be a knock-on effect for ships currently queuing outside ports, he added, meaning their next trips to the United States with new cargo will be delayed.

“We will see disruptions with the delay of some ships leaving Europe and the Mediterranean towards the end of October and the beginning of November,” Sand said.

The departure of ships from Asia will be delayed towards the end of December and the beginning of January “and this is essentially when the next normal mini-peak in container shipping will occur, in the run-up to the Chinese New Year “.

Workers picket outside the APM Container Terminal at the Port of Newark, Newark, New Jersey, United States, Tuesday, October 1, 2024.

Bloomberg | Bloomberg | Getty Images

“So it's really a critical time with so much at stake now. You could say it's a perfect storm, but it's also a really good bargaining position for those who want a strike,” said Sand.

For U.S. consumers, he said the strike could soon lead to shortages of perishable or temperature-controlled products, like bananas and other fresh fruits.

“Precautionary measures”

Danish shipping giant Maersk has warned that a closure of just one week could take four to six weeks to recover, “with significant backlogs and delays worsening with each passing day.”

In an update released Monday, Maersk said these disruptions would likely cause delays in the movement of goods, increased costs and logistical challenges for companies relying on ports on the U.S. East Coast and Gulf. A protracted labor dispute, the company added, could exacerbate these disruptions.

However, not everyone is as concerned about the broader economic ramifications of strikes at U.S. ports.

Bradley Saunders, North America economist at Capital Economics, said in a research note published late last month that the strike was unlikely to trigger major economic disruption because, despite prior denials, the US President Joe Biden would have “no choice” but to intervene. and invoke back-to-work legislation before the November election.

Biden has said he would not use existing labor laws to force union workers back to work, which is within his powers under the Taft-Hartley Act.

Shipping containers are stacked as dockworkers are on strike at Port Newark on October 1, 2024 in New Jersey.

Bryan R. Smith | Afp | Getty Images

Passed in 1947, the Taft-Hartley Act was a revision of U.S. law governing labor relations and union activity that granted a U.S. president the power to suspend a strike for an 80-day “cooling off period” in cases where “national health or security” is in danger.

“Frequent shocks to supply chains in recent years have made producers more aware of the risks associated with low inventories,” Saunders said on September 25.

“It is therefore likely that companies will have taken precautionary measures in the event of a strike, particularly because this possibility has been touted for months by the ILA,” he added.

CNBC's Lori Ann LaRocco contributed to this report.

Sources 1/ https://Google.com/ 2/ https://www.cnbc.com/2024/10/01/what-a-lengthy-us-port-strike-could-mean-for-global-supply-chains.html The mention sources can contact us to remove/changing this article

What Are The Main Benefits Of Comparing Car Insurance Quotes Online

LOS ANGELES, CA / ACCESSWIRE / June 24, 2020, / Compare-autoinsurance.Org has launched a new blog post that presents the main benefits of comparing multiple car insurance quotes. For more info and free online quotes, please visit https://compare-autoinsurance.Org/the-advantages-of-comparing-prices-with-car-insurance-quotes-online/ The modern society has numerous technological advantages. One important advantage is the speed at which information is sent and received. With the help of the internet, the shopping habits of many persons have drastically changed. The car insurance industry hasn't remained untouched by these changes. On the internet, drivers can compare insurance prices and find out which sellers have the best offers. View photos The advantages of comparing online car insurance quotes are the following: Online quotes can be obtained from anywhere and at any time. Unlike physical insurance agencies, websites don't have a specific schedule and they are available at any time. Drivers that have busy working schedules, can compare quotes from anywhere and at any time, even at midnight. Multiple choices. Almost all insurance providers, no matter if they are well-known brands or just local insurers, have an online presence. Online quotes will allow policyholders the chance to discover multiple insurance companies and check their prices. Drivers are no longer required to get quotes from just a few known insurance companies. Also, local and regional insurers can provide lower insurance rates for the same services. Accurate insurance estimates. Online quotes can only be accurate if the customers provide accurate and real info about their car models and driving history. Lying about past driving incidents can make the price estimates to be lower, but when dealing with an insurance company lying to them is useless. Usually, insurance companies will do research about a potential customer before granting him coverage. Online quotes can be sorted easily. Although drivers are recommended to not choose a policy just based on its price, drivers can easily sort quotes by insurance price. Using brokerage websites will allow drivers to get quotes from multiple insurers, thus making the comparison faster and easier. For additional info, money-saving tips, and free car insurance quotes, visit https://compare-autoinsurance.Org/ Compare-autoinsurance.Org is an online provider of life, home, health, and auto insurance quotes. This website is unique because it does not simply stick to one kind of insurance provider, but brings the clients the best deals from many different online insurance carriers. In this way, clients have access to offers from multiple carriers all in one place: this website. On this site, customers have access to quotes for insurance plans from various agencies, such as local or nationwide agencies, brand names insurance companies, etc. "Online quotes can easily help drivers obtain better car insurance deals. All they have to do is to complete an online form with accurate and real info, then compare prices", said Russell Rabichev, Marketing Director of Internet Marketing Company. CONTACT: Company Name: Internet Marketing CompanyPerson for contact Name: Gurgu CPhone Number: (818) 359-3898Email: [email protected]: https://compare-autoinsurance.Org/ SOURCE: Compare-autoinsurance.Org View source version on accesswire.Com:https://www.Accesswire.Com/595055/What-Are-The-Main-Benefits-Of-Comparing-Car-Insurance-Quotes-Online View photos