After the breakdown of new labor contracts negotiations, on Tuesday morning (October 1st), dockworkers on the U.S. East Coast and Gulf Coast initiated the first major strike in nearly 50 years, leading to a halt in about half of the nation’s deep-sea shipping.
According to Reuters, transportation at dozens of ports across the United States came to a standstill due to the strike. Experts have warned that the economic losses caused by the strike could amount to billions of dollars per day. This not only threatens jobs but also risks exacerbating inflation.
Representing 45,000 dockworkers, the International Longshoremen’s Association (ILA) has been negotiating with the United States Maritime Alliance (USMX) in hopes of reaching a new six-year labor agreement before midnight on Monday (September 30th).
On Tuesday (October 1st), ILA stated in a release that all ports from Maine to Texas have been closed since early morning on October 1st Eastern Time. ILA stated that they rejected the final offer made by USMX on Monday as the contract fell far short of their members’ demands.
Harold Daggett, President and Chief Negotiator of ILA, stated that container shipping operator Maersk and its APM North America terminal company failed to provide adequate wage increases and did not agree to the demand to halt port automation projects.
USMX, in a statement on Monday, raised wage offers and agreed to a nearly 50% wage increase.
“If necessary, we are prepared to continue the strike to fight for the wages our union members deserve and against automation,” Daggett stated on Tuesday. “If they want us to end the strike, they must meet our demands.”
USMX did not immediately respond to Reuters’ request for comment.
This is the first major strike by ILA members since 1977. This has raised concerns among businesses that rely on deep-sea shipping for international trade.
The strike has impacted operations at 36 ports in the United States, involving a range of container shipments from bananas and clothing to automobiles.
Rick Cotton, Executive Director of the Port Authority of New York and New Jersey, stated that currently nearly 100,000 containers are waiting to be unloaded at ports in New York City due to the strike. Over the next week, 35 container ships are set to arrive in New York.
A White House official stated that White House Chief of Staff Jeffrey Zients and Chief Economic Advisor Lael Brainard urged USMX board to fairly and swiftly resolve the labor dispute in a meeting on Monday. However, the Biden administration has ruled out the possibility of using federal power to end the strike.
Suzanne Clark, President of the U.S. Chamber of Commerce, urged President Biden on Monday to reconsider using this federal power. She said, “Allowing a contract dispute to have such a significant impact on our economy is unreasonable.”
On Tuesday, White House officials anonymously told Reuters that they do not want the strike to drag on for too long. The official stated that both labor and management resumed negotiations on Sunday evening and have narrowed their differences in the past 24 hours, which is a positive sign.
New York Governor Kathy Hochul indicated that food and essential supplies in New York State are not expected to be immediately affected by the strike but warned that the impact could escalate depending on how long the strike continues.
Hochul stressed on Tuesday that “USMX and ILA must reach a fair agreement promptly to respect workers and ensure the smooth operation of our ports.”