Dockworkers at ports from Maine to Texas began picketing early Tuesday, striking over wages and automation that could stoke inflation again and lead to freight shortages if it lasts more than a few weeks.
The contract between the ports and about 45,000 members of the International Longshoremen’s Association expired at midnight, and even though progress was reported in negotiations on Monday, workers went on strike.
The strike affecting 36 ports is the first by the union since 1977.
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 union placed a message board on the side of a truck that read: “Automation hurts families: ILA stands for job security.”
The American Maritime Alliance, which represents ports, said Monday evening that both sides had backed down from their previous wage proposals, but as picket lines grew after midnight, it was clear no agreement had been reached.
The union’s initial offer in the negotiations was for a 77% wage increase over the six-year life of the contract, with president Harold Daggett saying this was necessary to account for inflation and small increases over the years.
The base salary of ILA members is approximately $81,000 per year, but some can earn more than $200,000 annually with large amounts of overtime.
But on Monday evening, the alliance said it had increased its offer by 50% over six years, and it promised to maintain limits on automation from the old contract.
The union wants a complete ban on automation. It was not clear how far apart the two sides were.
“We hope this can allow us to fully resume collective bargaining on other outstanding issues in an effort to reach an agreement,” the coalition’s statement said.
The union did not respond to requests for comment on Monday night’s talks, but said earlier in the day that the ports had rejected demands for a fair contract and the coalition seemed intent on striking. The two sides have not held formal talks since June.
The coalition said it offers tripling employer contributions to retirement plans and strengthening health care options.
During the day Monday, some ports were already preparing for the strike. For example, the Port of Virginia was in the process of ceasing operations.
It accepted the last arriving train for delivery at 8 a.m., closed its gates to incoming trucks at noon and asked ships to depart by 1 p.m., ceasing cargo operations at 6 p.m.
“We’re handling it just like we would during a potential hurricane,” port spokesman Joe Harris told The Associated Press.
“And we will bring it back online just as we were recovering from the storm. We have an experienced team. We have done this before also.”
Supply chain experts say consumers won’t see an immediate impact from the strike as most retailers have stocked up on goods while pushing up shipments of holiday gift items.
But if it lasts more than a few weeks, the work stoppage will significantly disrupt the country’s supply chain, potentially driving up prices and delaying goods reaching homes and businesses.
If the strike ends, the strike would force businesses to pay shippers for delays and cause some goods to arrive late for the peak holiday shopping season – potentially ranging from toys or artificial Christmas trees to cars, Delivery of anything from coffee to fruits will be affected.
For example, a strike is likely to have an almost immediate impact on the supply of perishable imports such as bananas.
According to the American Farm Bureau Federation, the ports affected by the strike handle 3.8 million metric tons of bananas each year, or 75% of the nation’s supply.
It could also disrupt exports from East Coast ports and create traffic jams at West Coast ports, where workers are represented by a separate union.
Railroads say they can build ramps to move more freight to the West Coast, but analysts say they can’t compensate for the amount of freight headed east.
“If the strikes go ahead, they will cause massive delays in the supply chain, the impact of which will undoubtedly last until 2025 and create chaos across the industry,” said Jai Dhokia, founder of supply chain management and logistics firm Pro3PL.
JPMorgan estimates that the strike that closed East and Gulf Coast ports could cost the economy $3.8 billion to $4.5 billion per day, some of which would be recovered over time after normal operations resume. Will be done.
The strike comes weeks before the presidential election and could become a factor if shortages occur.
Retailers, auto parts suppliers and product importers were hoping for an agreement or that President Joe Biden would intervene and end the strike using the Taft-Hartley Act, which allows them to seek an 80-day cooling off period.
But during a call with reporters on Sunday, Biden, who has worked to drum up union votes for Democrats, said “no” when asked if he planned to intervene in a potential work stoppage.
A White House official said on Monday that at Biden’s direction, the administration is in regular contact with the ILA and the coalition to advance negotiations.
The President directed Chief of Staff Jeff Zients and National Economic Council Director Lael Brainard to convene the coalition’s board members on Monday afternoon and urge them to resolve the dispute fairly and quickly – in a manner that has been avoided in recent years. The success and contribution of shipping companies should be taken into account. Of union workers.
