OAN Staff James Myers
10:35am – Tuesday, October 1, 2024
Longshoremen all the way from the East Coast and Gulf Coast went on strike just after midnight on Tuesday, a move that could significantly increase inflation and cause production shortages as the holiday season begins.
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The work stoppage took effect at 12:01 a.m. Tuesday after the International Longshoremen's Association (ILA), which represents 45,000 workers, and an alliance representing the ports failed to reach a new collective bargaining agreement.
It will be the first time since 1977 that the 36 ports from Maine in the north to Texas in the south, which handle the country's $3 trillion in annual international trade, will be shut down due to work stoppages.
The work stoppage comes as striking workers are demanding higher wages and protection against automation.
However, the large-scale work stoppage halts billions of dollars' worth of daily trade and threatens to cause significant damage to an economy struggling with ongoing inflation.
Additionally, the outage comes as several states begin recovery efforts from the devastating aftermath of Hurricane Helen.
Retailers such as Walmart, IKEA, Samsung, Bob's Discount Furniture, LG and Home Depot, which rely heavily on imported goods, would be most exposed to the effects of a prolonged strike.
Late Monday night, the United States Maritime Union (USMX), an umbrella group representing port operators, proposed a 50% pay increase over six years in a last-minute attempt to avert a strike.
According to , the ILA rejected the offer despite the increase. CNBC. Port owners hoped the offer would help restart negotiations between the two sides.
Moreover, the unions seem content to stick to their demands. “We're going to crush them,” ILA president Harold Daggett told rank-and-file members who voted unanimously to authorize the strike in a video.
“What we're doing here is historic,” Daggett told union members. “They don't live very long.”
By Monday, weeks had passed for both sides to discuss a new contract.
A strike was expected to begin as negotiations remained inconclusive.
Several major ports, including Boston, New York, New Jersey, Philadelphia, Baltimore, Houston and Miami, began scaling back operations ahead of the work stoppage.
However, if the outage lasts more than a few weeks, it will cause major disruptions to the country's supply chain, leading to higher prices and delays in goods reaching households and businesses.
Additionally, the strike is likely to have an immediate impact on fresh imports.
The strike could also affect exports from East Coast ports and cause traffic jams at West Coast ports where workers are represented by different unions.
Jay Dhokia, founder of supply chain management and logistics company Pro3PL, said: “If the strike goes ahead, it will cause significant delays throughout the supply chain, with ripple effects that will undoubtedly be felt in 2025 and across the industry.'' It will cause confusion.”
JPMorgan said the strike, which shut down ports on the East Coast and Gulf Coast, could cost the economy $3.8 billion to $4.5 billion a day, some of which would be lost once normal operations resume. We estimate that it will recover over time.
Retailers, agricultural importers and auto parts suppliers have been forced to intervene by halting strikes using the Taft-Hartley Act, which allows for a settlement to be reached or for President Joe Biden to call for an 80-day cooling-off period. I was hoping it would come.
Biden also said Sunday that he would not intervene in potential work stoppages.
“The U.S. government should stay out of this fight and allow union members to withhold their work for the wages and benefits they earn,” Teamsters President Sean O'Brien said in a statement.
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