Strike shuts US East and Gulf Coast ports for first time since 1977 in blow to shipments
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Dock workers have walked out of every major port on the US East and Gulf coasts, which have the combined capacity to handle as much as half of all US trade volumes.
PHOTO: BLOOMBERG
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Los Angeles – Dock workers have walked out of every major port on the US East and Gulf coasts, marking the beginning of a strike that could ripple through the world’s largest economy
The affected ports have the combined capacity to handle as much as half of all US trade volumes and the strike will halt container cargo and auto shipments.
The significance of a work stoppage at every major container port from Houston to Miami and New York-New Jersey depends on how long the strike lasts.
Analysts said the disruption could cost the US economy an estimated US$5 billion (S$6.4 billion) a day, threaten jobs and stoke inflation.
A backup resulting from a week-long strike would take about a month to clear, according to Ms Grace Zwemmer at Oxford Economics.
The International Longshoremen’s Association (ILA) is seeking higher wages and a rollback of the language on automation in the six-year contract that expired at midnight. Its fiery leader Harold Daggett has for months threatened a strike starting on Oct 1 if no deal is reached before the deadline.
The last time East and Gulf Coast dock workers went on strike was in 1977.
The ocean carriers 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 talks in June.
The union is “holding the entire country over a barrel”, said Mr Steve Hughes, chief executive of HCS International, which specialises in automotive sourcing and shipping.
“I’m really afraid that it is going to be ugly,” he added.
The dispute is wedging labour-friendly US President Joe Biden into a virtual no-win position as Vice-President Kamala Harris runs a razor-tight election race against Republican former president Donald Trump.
Biden administration officials had met both USMX and ILA ahead of the strike to encourage a deal. But Mr Biden’s administration has repeatedly ruled out the use of federal powers to break a strike in the event of an impasse.
US Chamber of Commerce president Suzanne Clark urged Mr Biden on Sept 30 to reconsider, saying it “would be unconscionable to allow a contract dispute to inflict such a shock to our economy”.
Companies have been taking steps for months, including by diverting shipments to West Coast ports. In California, the Port of Long Beach reported its best month of activity on record in August.
But West Coast ports cannot absorb all the cargo that goes through East and Gulf Coast hubs. Transporting cargo on lorries or trains from the West Coast ports to the East Coast could become a growing financial burden for companies as the strike goes on.
Retailers, accounting for about half of all container shipping volume, have been busily implementing backup plans as they head into their all-important winter holiday sales season.
Many of the big players rushed in Halloween and Christmas merchandise early to avoid any strike-related disruptions, incurring extra costs to ship and store those goods.
Retail behemoth Walmart, the largest US container shipper, and membership warehouse club operator Costco say they are doing everything they can to mitigate any impact.
New York Governor Kathy Hochul said on Sept 30 that the state expects no immediate impact on food suppliers or essential goods. BLOOMBERG, REUTERS
