Fruit and vegetable importer Peter Kopke Sr. discusses the impact of the impending port strike on 'The Bottom Line'.
In less than a week, Longshoremen at East Coast and Gulf Coast ports They promised to go on strike unless a new contract was reached.
A work stoppage could cause serious disruption to the U.S. economy and the longshoremen represented by it. International Longshoremen's Association (ILA)and port employers represented by the United States Maritime Alliance (USMX) remain at an impasse over wages in the new contract.
ILA is negotiating on behalf of 45,000 longshoremen at 30 U.S. ports from Maine to Texas, which collectively process about half of the country's seaborne imports. Members warned that unless a new contract is signed by the October 1 deadline, they are prepared to cease operations, leaving various sectors in dire straits.
Port strike could have 'devastating' economic impact, retail industry group says
Current position of both parties:
USMX said in a recent statement that despite attempts to work with the ILA, it has been “unable to schedule a meeting to continue negotiations on a new master agreement.”
The group said it was ready to negotiate at any time. However, USMX said in a statement released earlier this week that the ILA does not appear to be interested in negotiations at this time.
Charleston Harbor in Charleston, South Carolina. (Photographer: Sam Wolfe/Bloomberg via Getty Images / Getty Images)
“The USMX receives assistance from the Department of Labor, the Federal Mediation and Conciliation Service (FMCS), and other federal agencies, and we will keep them updated on the status of negotiations,” the alliance said Monday, adding Ta. “We would be willing to work with FMCS, as we have successfully done in the past, but that will only be possible if both sides agree to mediation.”
Meanwhile, the ILA said in a statement that USMX was “carrying out misleading propaganda claiming that the International Longshoremen's Association (ILA) has refused to negotiate.”
ILA also said the impasse is occurring because USMX continues to offer “unacceptable wage increase packages” to longshoremen.
“The USMX knows what the bottom line in wages needs to be for ILA rank and file employees to ratify a new master contract agreement,” said ILA International President Harold Daggett. said. He added that USMX had called “several times each week to try to get ILA to accept a lower wage package.”
Amazon fulfillment center staff will process your order. (Matt Cardy/Getty Images/Getty Images)
Potential impact
Officials, including the nation's largest retail trade association, have called for the Biden administration to get involved given the seriousness of the situation.
JPMorgan estimates that if a port is closed for one day, it will take about six days to clear the backlog. Analysts predict the economic impact of the strike as follows: Approximately $5 billion per day, According to a research note published earlier this month.
Jonathan Gold, vice chairman of supply chain and customs policy at the National Retail Federation (NRF), previously told FOX Business that even a minor disruption to the supply chain could be a “significant disruption for both retailers and consumers.” “This will have a negative impact on the timing and cause delays.” .
These types of disruptions in shipping and supply chains often lead to product shortages and drive up prices.
Sarson Logistics CEO Jason Fisk told FOX Business that shoppers “need to prepare for higher product prices by the first quarter of 2025, or sooner.” Ta.
Additionally, Cody Moore, a partner and wealth advisor at wealth management firm Wealth Enhancement and Prevention, told FOX Business that rising prices will increase inflation and delay further Fed rate cuts. He said it was possible.
July 18, 2023 at AutoNation dealership in Las Vegas, NV. (Bridget Bennett/Bloomberg via Getty Images/Getty Images)
Ultimately, a prolonged strike could “impact consumer costs such as mortgages, car loans and credit cards,” he said.
A prolonged port strike could delay the arrival of new vehicle inventory, raising costs for potential buyers. Not only are cars more difficult and expensive to purchase, but lack of necessary parts and materials makes maintenance repairs on existing cars difficult.
Can the president get involved?
Under a law known as the Taft-Hartley Act, the president has the power to intervene in labor disputes that threaten national safety or security, and the president can impose an 80-day cooling-off period to allow workers to return to work. Can be done. Negotiations continue.
But President Biden has signaled he does not intend to intervene in a potential attack, and the White House has issued a statement urging both sides to continue negotiations as the administration considers how to respond to supply chain disruptions. said.
Mr. Biden has been urged by the National Retail Federation and 177 trade groups representing retailers, manufacturers, farmers, automakers and truck drivers to intervene to expedite negotiations and prevent disruption.
FOX Business' Eric Revell contributed to this report.
