US East Coast Dockworkers Strike, Halting Half of the Nation’s Ocean Shipping – Reuters

By Doyinsola Oladipo and David Shepardson

NEW YORK – Dockworkers along the U.S. East Coast and Gulf Coast initiated a strike early Tuesday morning, marking the first significant stoppage in nearly 50 years. The walkout has disrupted approximately half of the country’s ocean shipping operations after negotiations for a new labor contract fell apart over wage disputes.

The strike affects the shipment of various goods, including food and automobiles, across numerous ports from Maine to Texas. Analysts predict that the economic impact could cost billions of dollars each day, endanger jobs, and contribute to inflation.

The International Longshoremen’s Association (ILA), which represents 45,000 port workers, had been in talks with the United States Maritime Alliance (USMX) for a new six-year contract before the midnight deadline on September 30. At 12:01 a.m. ET, the ILA announced the shutdown of all ports from Maine to Texas, citing that the final proposal from USMX made the previous day failed to meet the demands of its members.

Harold Daggett, the ILA’s outspoken leader, criticized employers like Maersk and APM Terminals North America for not offering adequate pay increases or addressing demands to halt port automation projects. The USMX, on its part, stated it had proposed almost a 50% wage increase over a prior offer.

"We are prepared to fight as long as necessary to secure fair wages and protections against automation for our members," Daggett declared. "USMX is now responsible for this strike, and they must meet our demands for it to end."

The USMX did not provide immediate comments regarding the situation.

This strike, the largest for the ILA since 1977, raises concerns for businesses dependent on ocean shipping for both exports and essential imports. It impacts 36 ports handling a wide array of containerized products, from bananas to automobiles.

Rick Cotton, the executive director of the Port Authority of New York and New Jersey, reported that nearly 100,000 containers await unloading in New York City-area ports, with 35 container ships scheduled to arrive in the coming week.

Steve Hughes, CEO of HCS International, expressed concern about the potential ramifications of the strike. "The union is holding the entire country over a barrel, and I fear the situation could escalate."

The ongoing dispute has complicated matters for the Biden administration, especially with Vice President Kamala Harris in a tight race against former President Donald Trump. White House Chief of Staff Jeff Zients and economic advisor Lael Brainard reportedly urged USMX board members to resolve the situation quickly and fairly, though the administration has ruled out utilizing federal power to intervene in labor disputes.

Suzanne Clark, president of the U.S. Chamber of Commerce, called on President Biden to reconsider this stance, stating that allowing the strike to continue could severely disrupt the economy.

While the White House has not commented on the current situation, insiders indicated they hope the strike will be brief, noting that talks had resumed late on Sunday, with both sides reportedly narrowing their differences.

BACKUP PLANS

Retailers, which represent about half of all container shipping volume, are implementing contingency plans as they prepare for the critical winter holiday sales season. To mitigate strike-related disruptions, many major retailers, including Walmart and Costco, expedited shipments of Halloween and Christmas merchandise, incurring additional logistics costs.

New York Governor Kathy Hochul noted that, for now, there is no immediate impact on food suppliers or essential goods, but these effects could expand depending on the duration of the strike. "It is crucial for USMX and ILA to reach a fair agreement soon that respects workers and ensures the continued flow of commerce through our ports," she stated on Tuesday.