Dockworkers from Maine to Texas go on strike in move that could spark economic doom

Dockworkers at dozens of ports stretching along the East and Gulf coasts walked the picket line after midnight on Tuesday as they launched a massive strike that threatens to reignite inflation and spark product shortages at the start of the holiday season.

The work stoppage went into effect at 12:01 a.m. on Tuesday after the International Longshoremen’s Association, which represents 45,000 workers, and the alliance representing ports failed to renew a collective bargaining agreement that had just expired.

For the first time since 1977, 36 ports stretching from strategic seaboard locations as far north as Maine and as far south as Texas – all of which handle an aggregate $3 trillion in the country’s annual international trade – will be idle due to a work stoppage.

The labor dispute, in which longshoremen are demanding higher wages and protections against automation of their jobs, puts a pause on billions of dollars worth of daily trade and threatens to cause significant damage to an economy that has been beset by stubbornly persistent inflation.

It also comes at a critical time when authorities are in need of supplies and goods to deliver in hopes of helping parts of the Southeast recover from the devastating effects of Hurricane Helene.

Ports throughout the Southeast and the Gulf lost power while congestion piled up as a result of the massive storm.

Retailers like Walmart, Ikea, Samsung, Bob’s Discount Furniture, LG and Home Depot that rely on imported goods have the most exposure to the damages that would ensue if the strike were to be prolonged.

Workers began picketing at the Port of Philadelphia shortly after midnight, walking in a circle at a rail crossing outside the port and chanting “No work without a fair contract.”

The United States Maritime Alliance (USMX), the umbrella group representing the managers of the ports, sought to avert a strike at the last minute late on Monday night – offering a 50% wage hike over six years.

But the ILA rejected the offer, according to CNBC. Port ownership hoped that the offer would lead to renewed talks between the two sides.

The union appears to have dug in on its demands. In a recent video, ILA President Harold Daggett told rank-and-file members who voted unanimously to authorize a strike: “We’ll crush them.”

Daggett was seen addressing union workers at Maher Terminals in Elizabeth, NJ early Tuesday in a video that was posted to Instagram.

“This is going down in history, what we’re doing here,” he told union members. “They can’t survive too long.”

Before Monday, it had been weeks since both sides sat down to talk about a new contract.

With negotiations at a standstill, the launch of the strike was anticipated. 

Several major ports including Boston, New York/New Jersey, Philadelphia, Baltimore, Houston and Miami began to wind down operations in advance of the work stoppage.

New York Gov. Kathy Hochul released a statement just after midnight on Tuesday saying that her state “has been working around the clock to ensure that our grocery stores and medical facilities have the essential products they need.”

Barring a dramatic breakthrough in talks, shippers won’t have the option of rerouting cargo to West Coast ports due to limits on capacity in handling more containers.

The dockworkers union representing workers out West secured a new labor contract recently, so they will not be joining the strike.

But those dockworkers as well as their counterparts in Canada are unlikely to agree to handle East Coast goods in a show of solidarity with striking union members.

“You can be sure the ILA’s 85,000 members will be supporting their Sisters and Brothers,” James McNamara, a spokesperson for the International Longshore and Warehouse Union, which represents dockworkers on the West Coast, said in a statement.

Supply chain experts say consumers won’t see an immediate impact from the strike because most retailers stocked up on goods, moving ahead shipments of holiday gift items.

But if it goes more than a few weeks, a work stoppage would significantly snarl the nation’s supply chain, potentially leading to higher prices and delays in goods reaching households and businesses.

If drawn out, the strike will force businesses to pay shippers for delays and cause some goods to arrive late for peak holiday shopping season — potentially impacting delivery of anything from toys or artificial Christmas trees to cars, coffee and fruit.

The strike will likely have an almost immediate impact on supplies of perishable imports like bananas, for example.

The ports affected by the strike handle 3.8 million metric tons of bananas each year, or 75% of the nation’s supply, according to the American Farm Bureau Federation.

It also could snarl exports from East Coast ports and create traffic jams at ports on the West Coast, where workers are represented by a different union.

Railroads say they can ramp up to carry more freight from the West Coast, but analysts say they can’t make up the cargo handled to the east.

“If the strikes go ahead, they will cause enormous delays across the supply chain, a ripple effect which will no doubt roll into 2025 and cause chaos across the industry,” noted Jay Dhokia, founder of supply chain management and logistics firm Pro3PL.

J.P. Morgan estimated that a strike that shuts down East and Gulf coast ports could cost the economy $3.8 billion to $4.5 billion per day, with some of that recovered over time after normal operations resume.

The strike comes just weeks before the presidential election and could become a factor if there are shortages.

Retailers, auto parts suppliers and produce importers had hoped for a settlement or that President Biden would intervene and end the strike using the Taft-Hartley Act, which allows him to seek an 80-day cooling-off period.

But during an exchange with reporters Sunday, Biden, who has worked to court union votes for Democrats, said “no” when asked if he planned to intervene in the potential work stoppage.

“The US government should stay the f–k out of this fight and allow union workers to withhold their labor for the wages and benefits they have earned,” Teamsters president Sean O’Brien said in a statement.

With Post wires