East Coast and Gulf Coast port workers went on strike as of 12:01 AM Tuesday morning.
After negotiations for a new labor contract broke down, nearly 45,000 workers represented by the International Longshoreman’s Association (ILA) walked off the job Tuesday morning, triggering a strike that could lead to severe supply constraints across virtually every industry, including light vehicle imports and parts delivery.
“From Maine to Texas”, several reports point out, the ILA union had been negotiating with the United States Maritime Alliance (USMX) to secure favorable terms for workers ahead of a Monday night deadline. The talks “fell far short of the demands of its members to ratify a new contract,” the ILA said in a statement, so a strike officially begain at 12:01 AM Eastern Time Tuesday.
“We are prepared to fight as long as necessary,” said ILA chief negotiator Harold Daggett, “to stay out on strike for whatever period of time it takes, to get the wages and protections against automation our ILA members deserve.” While the USMX has not made a counterstatement as of Tuesday morning, it did say Monday that it offered to boost port workers’ wages by nearly 50%. However, the ILA union is pushing for a 61.5% increase and, at least at this point, has not gotten that level of concession. As a result, hundreds of port employees in New York and New Jersey, among several others, took to the picket lines.
This major stoppage is the ILA’s first since 1977. Analysts estimate the economic impact to the American economy could total $5 billion each day, as shipments fail to make their way into or out of affected ports.
The scale of the supply disruption, of course, depends on how long the strike lasts, and whether the Biden administration ultimately decides to intervene. For the moment, President Biden says he will not wade into the matter, while urging both sides to quickly come to an agreement. Retailers, for their part, have been speeding up imports or shifting goods to West Coast ports in anticipation of a strike that could, in the long-term, impact availability and pricing on containerized goods including food and vehicles, and everything in between.
Per Reuters, officials say they are hoping for a short strike and narrowed their differences Monday, though we will have to wait and see how quickly the ILA and USMX reach an agreement.
