Tens of thousands of dockworkers have gone on an indefinite strike at major US ports, causing significant disruption to trade and economic activity ahead of the presidential election and the holiday shopping season.
The International Longshoremen’s Association (ILA) walked out on Tuesday, paralysing 14 ports along the east and gulf coasts, halting all container traffic from Maine to Texas. This marks the first large-scale port shutdown in nearly 50 years.
Despite the potential for intervention, the White House has stated that President Joe Biden does not plan to suspend the strike for 80 days, a power he holds under federal law to allow for further negotiations. The labour dispute stems from stalled talks over a six-year master contract covering around 25,000 dockworkers, with issues ranging from wages and pensions to the threat of automation in the shipping industry.
The US Maritime Alliance (USMX), which represents shipping companies, port associations, and marine terminal operators, said it had offered to raise wages by 50%, increase pension contributions, and enhance healthcare options. However, ILA president Harold Daggett has pressed for more significant pay rises, citing the soaring profits of shipping firms during the pandemic, while workers faced stagnant wages and inflation.
The union’s demands include a $5 per-hour wage increase per year over the life of the contract, amounting to roughly 10% annual pay hikes. Under the previous agreement, wages ranged from $20 to $39 per hour, depending on experience. Workers also received bonuses linked to container trade volumes.
The strike threatens to ripple through the US economy, potentially causing delays in the supply of time-sensitive imports, including food and agricultural goods. According to the Farm Bureau, the affected ports handle 14% of agricultural exports and more than half of imports, including large quantities of bananas and chocolate. Other sectors exposed to disruption include tin, tobacco, and European cars, with many shipments routed through key ports like Baltimore.
Experts warn that the longer the strike continues, the greater the economic fallout. Grace Zemmer, an economist at Oxford Economics, estimates that each week of the strike could result in a $4.5 billion loss to US economic growth, with more than 100,000 people potentially facing temporary unemployment. Seth Harris, a former White House adviser on labour issues, noted that while immediate effects may be limited, shortages and price increases could arise within weeks.
Businesses have already taken steps to import goods ahead of the strike, but the long-term impact could see shipping costs rise, particularly for industries reliant on “just-in-time” supply chains. Peter Sand, chief analyst at Xeneta, warned that the strike could have a domino effect across the US economy, exacerbating shipping delays and price increases in the coming months.
As the strike unfolds, the nation watches closely, with the potential for further disruption if additional ILA members join the action. Union leaders have hinted at the possibility of a wider strike, though details remain unclear.
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