Dockworkers are set to walk out of every major port on the US East and Gulf Coasts, marking the start of a strike that could spread to the world’s largest economy and cause political unrest just weeks before the presidential election.
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(Bloomberg) — Dockworkers are scheduled to walk out of every major port on the U.S. East and Gulf coasts, marking the start of a strike that could spread to the world’s largest economy and cause political unrest just weeks before the presidential election.
The affected ports have the combined capacity to handle up to half of total U.S. trade volumes, and the strike will halt container shipments and vehicle shipments. Energy supplies and bulk cargo such as municipal waste and road salt will not be affected. Some exceptions will be made to allow the movement of military cargo and cruise ships.
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The significance of the work stoppage at every major container port from Houston to Miami and New York-New Jersey depends on how long the strike lasts. The economic loss from the shutdown, which was scheduled to begin at 12:01 a.m. Tuesday ET, will range from $3.8 billion to $4.5 billion per day, according to JPMorgan Chase & Co.
It will take about a month to clear the backup created by a week-long strike, according to Grace Zwemer of Oxford Economics.
The International Longshoremen’s Association is seeking to raise wages and roll back automation language in a six-year contract that expires at midnight. Union leader Harold Daggett has threatened for months to strike starting October 1 if an agreement is not reached before the deadline. The last time East Coast and Gulf dock workers went on strike was in 1977.
Shipping companies and terminal operators represented by the US Maritime Alliance, also known as USMX, have accused the ILA of refusing to negotiate since the union called off the talks in June. A strike was certain until Monday afternoon, when reports emerged that the White House had been in contact with both sides over the weekend and some progress had been made on wages.
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President Joe Biden, who prides himself on being pro-union, has said the dispute is a matter of collective bargaining and he will not invoke his authority under national security laws to order dockworkers to return to ports while negotiations continue.
Trade, transportation and retail industry groups urged the White House to intervene to prevent or stop the strike.
“It would be unreasonable to allow a contract dispute to cause such a shock to our economy,” Susan Clark, CEO of the U.S. Chamber of Commerce, wrote in a letter to Biden on Monday. “Taft-Hartley will buy time for both parties in the negotiations to reach an agreement on a new labor contract,” Clark continued, referring to a 1947 congressional law that allows the president to intervene in labor disputes involving national security.
ILA leader Daggett warned the White House against intervening, saying that if dock workers were forced to return to ports, dock workers would handle fewer containers than usual, slowing operations.
The union has not endorsed a presidential candidate, although former President Donald Trump, Daggett said, “promised to support the Department of Lands in its opposition to automated plants” during a Mar-a-Lago meeting last fall. Neither Trump nor Vice President Kamala Harris drew public attention to the strike threat.
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Earlier Monday, New York Governor Kathy Hochul urged people not to rush to grocery stores to stock up on supplies as they did during the pandemic. “The food supply is safe now,” she added. Although there are supplies and consumer goods in warehouses, residents could start to see store shelves depleted if there is an extended downtime of a few weeks.
Meanwhile, the flow of goods has already been affected by the threat of disruption. Many importers brought their goods in early or through West Coast ports to mitigate risks. Port terminals up and down the coasts reduced operations ahead of the midnight deadline, and railroads also pulled service.
“The most important thing is for carriers, shippers and workers to reach an agreement,” Transportation Secretary Pete Buttigieg said on Bloomberg TV’s “Balance of Power.” “There’s really no alternative to getting ports up and running.”
-With assistance from Josh Wingrove and Kylie Laparra.
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