Unionized dockworkers at 36 East and Gulf Coast ports began [1] a strike early Tuesday, marking the first such action by the International Longshoremen’s Association (ILA) since 1977.
The strike comes amid a breakdown in negotiations over a new contract between the ILA, which represents 45,000 dockworkers, and the U.S. Maritime Alliance (USMX), the organization representing port employers.
🚨#BREAKING [2]: Over 45,000 U.S. port workers have officially gone on strike from Maine to Texas for the first time since 1977
📌#Unitedstates [3] | #USA [4]
Currently, nearly 50,000 members of the International Longshoremen’s Association (ILA) are on strike for the first time since 1977,… pic.twitter.com/5yaLfQ7I5l [5]
— R A W S A L E R T S (@rawsalerts) October 1, 2024 [6]
The workers’ six-year contract expired Monday night, and negotiations have stalled over wage increases, compensation, and job protections against automation at the ports.
The strike, which affects key U.S. ports from Maine to Texas, is expected to significantly disrupt the nation’s supply chain, particularly in the handling of both imports and exports.
These ports are crucial to the U.S. economy, managing approximately half of the country’s imports, including goods such as cars, auto parts, agricultural products, machinery, and apparel.
The strike could also impact exports of critical goods such as pharmaceuticals, food products, and plastics.
An analysis by J.P. Morgan estimates that the strike could cost the U.S. economy between $3.8 billion and $4.5 billion per day as operations slow or halt.
The ILA has said it will exempt cruise ships and military cargo from the strike to avoid disrupting travelers’ schedules and ensure national security remains intact.
However, the wider impact on commercial imports and exports will be significant, with the potential to further drive up costs for consumers across the country.
USMX had made an offer to the union on Monday afternoon, which included a nearly 50% wage increase over the new contract, tripled employer contributions to retirement plans, and better health care provisions, while maintaining existing language on automation.
Despite the offer, the ILA rejected the proposal without making a counteroffer, according to FOX Business sources.
The breakdown in negotiations follows a recent legal filing by USMX, which lodged an unfair labor complaint with the National Labor Relations Board (NLRB) against the ILA, accusing the union of refusing to negotiate.
The ILA dismissed the complaint as a “publicity stunt” and countered by criticizing port employers for not providing better wages.
As the strike moves forward, time is running out for the Biden-Harris administration to broker a deal.
Joe Biden, whose administration has attempted to facilitate talks between the two sides, has said he will not invoke the Taft-Hartley Act to intervene.
The Taft-Hartley Act would allow Biden to impose an 80-day “cooling off” period, during which workers would return to their jobs while negotiations continue.
Despite pressure from the U.S. Chamber of Commerce to invoke the law to “protect our economy,” Biden has held off, opting instead to allow negotiations to continue without federal intervention.
The U.S. Chamber of Commerce, which represents American businesses, warned that the strike could have serious economic consequences and called on Biden to act swiftly.
In a letter sent Monday, Chamber President Suzanne Clark urged the administration to invoke Taft-Hartley, stating, “Taft-Hartley would provide time for both parties in negotiations to reach a deal on a new labor contract.”
Meanwhile, Commerce Secretary Gina Raimondo downplayed [8] concerns about the impending strike during an interview with CNBC’s Squawk Box.
When asked about her thoughts on the strike and its potential to cripple supply chains, Raimondo responded, “I have not been very focused on that.” Instead, Raimondo used the appearance to promote the Biden-Harris administration’s economic policies and campaign efforts, while also addressing inflation, which she described as having achieved a “soft landing.”
CNBC: What are you hearing will happen if dockworkers strike and it goes longer than a week?
Harris-Biden Commerce Sec. Gina Raimondo: “I have not been very focused on that.”
😳 pic.twitter.com/Q6rpqsoiO8 [9]
— RNC Research (@RNCResearch) September 30, 2024 [10]
Her comments have drawn criticism from some quarters, as the strike threatens to exacerbate inflationary pressures and increase costs for goods across the country.
The strike is affecting 14 facilities along the East and Gulf coasts, and its duration remains uncertain.
The union is reportedly seeking wage hikes of up to 77% over the life of the contract, while USMX has offered wage increases of more than 40%.
The two sides have not met in person since June, further complicating negotiations as the strike continues.
As the strike moves into its first days, businesses and consumers alike are bracing for the economic impact, while the Biden-Harris administration faces mounting pressure to find a resolution that avoids prolonged disruptions to the U.S. supply chain.