Tens of thousands of dockworkers have gone on strike across the US East Coast, shutting down key ocean shipping routes – and raising concerns about shortages and inflation – in the build-up to November’s presidential election.
The shutdown by the International Longshoremen’s Association (ILA) stopped traffic at 36 ports from Maine to Texas starting at midnight on Tuesday.
It is the first port strike of its magnitude in five decades, threatening to inflict billions in losses to the US economy and hamper the flow of goods, such as food and clothing.
The US port workers launched the strike due to a labour dispute with employers’ group United States Maritime Alliance (USMX), after their six-year contract expired.
For their new contract, ILA wants USMX to increase wages by 77 percent over six years and bar any automation, which they believe threatens workers’ jobs.
While USMX offered to raise wages by 50 percent and keep current automation checks in place, ILA said that was not enough, especially in light of the industry’s massive profits during the COVID-19 pandemic, and inflation that has affected how far their previous paycheques went.
“We are prepared to fight as long as necessary, to stay out on strike for whatever period of time it takes, to get the wages and protections against automation our ILA members deserve,” ILA head Harold Daggett said in a statement Tuesday.
After shipping firms raked in billions during the pandemic, “we want them to pay back”, said local ILA president in Philadelphia Boise Butler. “They’re going to pay back”.
‘Afraid it’s going to be ugly’
While analysts say US consumers are unlikely to feel the effects of the strike immediately, their wallets could take a hit if it stretches on for too long.
“The worry is that the longer this lasts, the more retail shortages will happen and the more price increases Americans will see,” said Al Jazeera’s Kristen Saloomey from New Jersey, where, along with New York, some 100,000 unloaded shipping containers are piled up at ports.
“Those are containers that would be carrying goods that American people need,” Saloomey said
Fearing major losses, businesses who send or receive goods over the ocean are eyeing other shipping options, such as using the US West Coast for their deliveries. But “there’s no easy Plan B”, Erin McLaughlin, senior economist at the business research non-profit Conference Board told the AFP news agency.
“While shippers have already begun diverting some cargo to the West Coast, capacity for such alternative options are limited,” said McLaughlin.
Dockworkers on the West Coast are not on strike, as they are part of a separate union and have their own contract that they agreed on last year, securing a large increase in wages.
Steve Hughes, CEO of HCS International, which focuses on automotive shipping, told the Reuters news agency that the union’s strike is “holding the entire country over a barrel … I’m really afraid that it is going to be ugly”.
Forecaster Oxford Economics projects the standoff could drain $4.5bn-$7.5bn from the US economy each week.
Will the White House intervene?
The shutdown has put US President Joe Biden and Vice President Kamala Harris in a tough spot. Neither wants to alienate a powerful union or come across as anti-labour to their progressive base. But they are also wary of any damage to the economy, which voters have cited as their top priority heading into elections.
So far, the White House has indicated it will not step in and directly intervene in the labour stoppage, despite calls from some retailers. On Tuesday, Biden said that “collective bargaining” was the best way for workers to get the pay and benefits “they deserve”. He added that it was time for USMX to negotiate a “fair contract” with the dockworkers.
The US administration’s Supply Chain Disruptions Task Force will also hold daily meetings to tackle any possible supply chain challenges.