A dockworker strike is set to begin Tuesday. It could disrupt everything from medicine to holiday gifts.
Ayelet Sheffey, Juliana Kaplan, and Katherine Tangalakis-Lippert
Sep 29, 2024, 5:58 PM EDT
A major maritime workers' strike is set to begin on Tuesday, and it would likely mean a slowdown of imports and exports of key goods — including cars and food — across the East Coast and the Gulf Coast.
The International Longshoremen's Association, the largest union of maritime workers in the US, announced last week that it was prepared to strike on October 1 if demands for its union contract, primarily higher wages, are not met. On Sunday, the union said the strike was set to go ahead after contract negotiations stalled.
The union said in a statement posted on Facebook that the United States Maritime Alliance, which represents the companies that employ longshoremen, "refuses to address a half-century of wage subjugation where Ocean Carriers profits skyrocketed from millions to mega-billion dollars, while ILA longshore wages remained flat." It added, "ILA unity remains strong and is growing."
It said the strike would include 85,000 members of the International Longshoremen's Association and "tens of thousands of dockworkers and maritime workers around the world" striking "at all Atlantic and Gulf Coast ports from Maine to Texas."
In a press release, the union said it told its membership that its workers, who primarily work on shipping docks to load, unload, and inspect cargo and operate heavy machinery, were "struggling to pay their mortgages and rent, car payments, groceries, utility bills, taxes, and, in some cases, their children's education," emphasizing the need for boosted pay in its contract.
A strike would have widespread implications for the US, with significant shipment delays that could set off a chain reaction of disruptions. It would be the first coastwide strike by ILA members since 1977, Reuters reported.
"A prolonged strike could lead to weeks or possibly months of shipping delays and backlogs, worsened by limited rerouting options, high costs, and time constraints," Abe Eshkenazi, the CEO of the Association for Supply Chain Management, told BI. "The supply chain is inextricably linked, and as we enter the busiest shopping season of the year, businesses, retailers, and consumers alike will feel the impact of a stoppage."
According to the National Association of Manufacturers, over half of imports and exports come through East Coast and Gulf Coast ports, handling pharmaceuticals and vehicles, among other things, with an average value of more than $2.1 billion each day. Depending on the length of the strike, supply-chain disruptions could also lead to price hikes for consumers.
The United States Maritime Alliance said last Monday that despite attempts to resume bargaining with the ILA, it had been "unable to schedule a meeting to continue negotiations.
"Our goal remains the same — we want to bargain and avoid a strike, but time is running out if the ILA is unwilling to return to the table," the group added.
The union said that the sides had communicated several times in the past few weeks but that a stalemate remained over wage offers.
A strike could delay shipments and trigger price hikes
Mia Ginter, the director of ocean export products at the transportation company CH Robinson, wrote in a blog post in August that a strike would affect all industries — but that those making time-sensitive products, like cars or pharmaceuticals, would face severe disruptions right off the bat.
"Many auto parts and components are imported through the East Coast, so the risk of production delays would be high," Ginter said.
Bethann Rooney, the port director of the Port Authority of New York and New Jersey, said on September 19 that operators were trying to "bring in as many ships as possible" ahead of a strike and encouraging shippers "to get as much cargo out as humanly possible as quickly as possible."
The retail industry could also face disruptions from the strike.
"Many retailers have already taken steps to mitigate the potential impact of a strike by bringing in products earlier or shifting products to the West Coast," Jonathan Gold, the National Retail Federation's vice president of supply chain and customs policy, told Business Insider. "The global supply chain is a complex system, and even a minor disruption would have a negative impact and cause delays at a critical time for both retailers and consumers."
Gold wrote in early September that holiday shipments would likely not arrive on time. "Manufacturers might not receive parts, materials and supplies needed for production, which will lead to assembly lines shutting down," Gold said. "And farmers won't be able to get their products to overseas markets, which could lead to lost sales."
In its 2024 annual report, the Bureau of Transportation Statistics ranked the Port of New York and New Jersey fourth among the country's top 25 ports for total tonnage. An analysis by the nonprofit research group Mitre found that a strike would have a significant economic effect on the port, with a daily loss of about $640 million.
"We are coordinating with partners across the supply chain to prepare for any potential impacts," Steve Burns, a Port Authority spokesperson, told BI. "For the over 600,000 regional jobs our port supports and the $240 billion in goods moved through here each year, we urge both sides to find common ground and keep the cargo flowing for the good of the national economy."
Grace Zwemmer, an associate US economist with Oxford Economics, wrote in a note in early September that it would likely take four to seven days to clear up the backlog from each day the strike continues, "meaning even a two-week strike could disrupt supply chains until 2025." She referred to estimates from Sea-Intelligence that a strike would prevent 74,000 shipping containers from being unloaded each day. Additionally, she wrote that the strike would mean it takes longer for manufacturers to receive goods, which would, in turn, jack up prices for consumers.
Meanwhile, trade groups have called on the Biden administration to step in and help negotiate a deal — or at least ensure negotiations continue. They said a labor stoppage could harm both the economy and consumers.
"A strike at this point in time would have a devastating impact on the economy, especially as inflation is on the downward trend," the trade organizations wrote.
Some ports have begun prepping guidance for customers should the union go on strike. The Port of Houston said in a memo that it would extend its gate hours leading up to the strike to allow more time for the transport of goods, while other ports are scrambling to unload shipments in anticipation of a strike.
"Throughout the pandemic, longshore workers never took a day off," Dennis Daggett, the ILA's executive vice president, said on September 20. "We ensured the shelves were stocked and the supply chains stayed strong, even as we lost far too many of our own. Now, we need the public's support. The very corporations that profited off our hard work refuse to share those profits with the workers who make them possible."
What a Dockworker Strike Will Affect, From Medicine to Gifts to Prices - Business Insider
Ayelet Sheffey, Juliana Kaplan, and Katherine Tangalakis-Lippert
Sep 29, 2024, 5:58 PM EDT
A major maritime workers' strike is set to begin on Tuesday, and it would likely mean a slowdown of imports and exports of key goods — including cars and food — across the East Coast and the Gulf Coast.
The International Longshoremen's Association, the largest union of maritime workers in the US, announced last week that it was prepared to strike on October 1 if demands for its union contract, primarily higher wages, are not met. On Sunday, the union said the strike was set to go ahead after contract negotiations stalled.
The union said in a statement posted on Facebook that the United States Maritime Alliance, which represents the companies that employ longshoremen, "refuses to address a half-century of wage subjugation where Ocean Carriers profits skyrocketed from millions to mega-billion dollars, while ILA longshore wages remained flat." It added, "ILA unity remains strong and is growing."
It said the strike would include 85,000 members of the International Longshoremen's Association and "tens of thousands of dockworkers and maritime workers around the world" striking "at all Atlantic and Gulf Coast ports from Maine to Texas."
In a press release, the union said it told its membership that its workers, who primarily work on shipping docks to load, unload, and inspect cargo and operate heavy machinery, were "struggling to pay their mortgages and rent, car payments, groceries, utility bills, taxes, and, in some cases, their children's education," emphasizing the need for boosted pay in its contract.
A strike would have widespread implications for the US, with significant shipment delays that could set off a chain reaction of disruptions. It would be the first coastwide strike by ILA members since 1977, Reuters reported.
"A prolonged strike could lead to weeks or possibly months of shipping delays and backlogs, worsened by limited rerouting options, high costs, and time constraints," Abe Eshkenazi, the CEO of the Association for Supply Chain Management, told BI. "The supply chain is inextricably linked, and as we enter the busiest shopping season of the year, businesses, retailers, and consumers alike will feel the impact of a stoppage."
According to the National Association of Manufacturers, over half of imports and exports come through East Coast and Gulf Coast ports, handling pharmaceuticals and vehicles, among other things, with an average value of more than $2.1 billion each day. Depending on the length of the strike, supply-chain disruptions could also lead to price hikes for consumers.
The United States Maritime Alliance said last Monday that despite attempts to resume bargaining with the ILA, it had been "unable to schedule a meeting to continue negotiations.
"Our goal remains the same — we want to bargain and avoid a strike, but time is running out if the ILA is unwilling to return to the table," the group added.
The union said that the sides had communicated several times in the past few weeks but that a stalemate remained over wage offers.
A strike could delay shipments and trigger price hikes
Mia Ginter, the director of ocean export products at the transportation company CH Robinson, wrote in a blog post in August that a strike would affect all industries — but that those making time-sensitive products, like cars or pharmaceuticals, would face severe disruptions right off the bat.
"Many auto parts and components are imported through the East Coast, so the risk of production delays would be high," Ginter said.
Bethann Rooney, the port director of the Port Authority of New York and New Jersey, said on September 19 that operators were trying to "bring in as many ships as possible" ahead of a strike and encouraging shippers "to get as much cargo out as humanly possible as quickly as possible."
The retail industry could also face disruptions from the strike.
"Many retailers have already taken steps to mitigate the potential impact of a strike by bringing in products earlier or shifting products to the West Coast," Jonathan Gold, the National Retail Federation's vice president of supply chain and customs policy, told Business Insider. "The global supply chain is a complex system, and even a minor disruption would have a negative impact and cause delays at a critical time for both retailers and consumers."
Gold wrote in early September that holiday shipments would likely not arrive on time. "Manufacturers might not receive parts, materials and supplies needed for production, which will lead to assembly lines shutting down," Gold said. "And farmers won't be able to get their products to overseas markets, which could lead to lost sales."
In its 2024 annual report, the Bureau of Transportation Statistics ranked the Port of New York and New Jersey fourth among the country's top 25 ports for total tonnage. An analysis by the nonprofit research group Mitre found that a strike would have a significant economic effect on the port, with a daily loss of about $640 million.
"We are coordinating with partners across the supply chain to prepare for any potential impacts," Steve Burns, a Port Authority spokesperson, told BI. "For the over 600,000 regional jobs our port supports and the $240 billion in goods moved through here each year, we urge both sides to find common ground and keep the cargo flowing for the good of the national economy."
Grace Zwemmer, an associate US economist with Oxford Economics, wrote in a note in early September that it would likely take four to seven days to clear up the backlog from each day the strike continues, "meaning even a two-week strike could disrupt supply chains until 2025." She referred to estimates from Sea-Intelligence that a strike would prevent 74,000 shipping containers from being unloaded each day. Additionally, she wrote that the strike would mean it takes longer for manufacturers to receive goods, which would, in turn, jack up prices for consumers.
Meanwhile, trade groups have called on the Biden administration to step in and help negotiate a deal — or at least ensure negotiations continue. They said a labor stoppage could harm both the economy and consumers.
"A strike at this point in time would have a devastating impact on the economy, especially as inflation is on the downward trend," the trade organizations wrote.
Some ports have begun prepping guidance for customers should the union go on strike. The Port of Houston said in a memo that it would extend its gate hours leading up to the strike to allow more time for the transport of goods, while other ports are scrambling to unload shipments in anticipation of a strike.
"Throughout the pandemic, longshore workers never took a day off," Dennis Daggett, the ILA's executive vice president, said on September 20. "We ensured the shelves were stocked and the supply chains stayed strong, even as we lost far too many of our own. Now, we need the public's support. The very corporations that profited off our hard work refuse to share those profits with the workers who make them possible."
What a Dockworker Strike Will Affect, From Medicine to Gifts to Prices - Business Insider