Morgan Stanley Discusses Implications of Extended Work Stoppage

A strike by dockworkers that spans from the US East Coast to the Gulf Coast could negatively impact economic activity and elevate inflationary pressures if it continues for an extended period, according to analysts at Morgan Stanley.

The ports in these areas account for a significant 30% of American imports and exports, as noted by the analysts, who emphasized that maritime transport is the primary method for moving these goods.

Consequently, a lengthy strike could hinder local production, lead to a decrease in exports, increase prices for items such as food and beverages, and affect critical US payroll statistics, the analysts warned.

Since the work stoppage began earlier this week, shipments of a variety of products, including food and automobiles, have been stalled at ports from Maine in the Northeast to Texas in the South. The dockworkers are advocating for better pay as well as protections against automation.

The strike follows the collapse of negotiations between the International Longshoremen’s Association (ILA), which represents roughly 45,000 dockworkers, and the United States Marine Alliance (USMX), the employer organization. The ILA had been seeking to finalize a new six-year contract before a deadline that passed at midnight on September 30.

However, the ILA turned down the USMX’s final offer made earlier this week, arguing that it did not satisfy the needs of its members.

The USMX claimed it had offered an almost 50% wage increase, an improvement over a prior proposal, and expressed strong support for the collective bargaining process. The organization, which represents shipping companies and port authorities, also urged the ILA to facilitate a return to the negotiation table.

In contrast, ILA leader Harold Daggett indicated that the workers are “prepared to fight as long as necessary.”