Why workers plan to strike at ports across U.S. East — and how it could cause consumer chaos
CBC
Some 45,000 union workers could walk off the job at seaports on the U.S. East and Gulf Coasts on Oct. 1, cutting off vital trade arteries just weeks ahead of the U.S. presidential election.
A JPMorgan analysis projected that a strike could cost the U.S. economy $5 billion US daily.
The strike could hit 36 ports that handle about one-half of U.S. ocean imports. That could affect the availability of a range of goods shipped via container, from bananas to clothing to cars, while creating weeks-long backlogs at ports.
It could also stoke shipping cost increases that may be passed on to voters already frustrated with housing and food inflation, according to logistics experts.
The International Longshoremen's Association (ILA) union, which represents workers at ports from Maine to Texas, and the United States Maritime Alliance employer group appear to have hit an impasse over pay. The current six-year contract expires at midnight on Sept. 30.
A strike at all East Coast and Gulf of Mexico ports would be the first for the ILA since 1977.
The White House said it is not trying to help broker a deal, as it did last year during West Coast talks, and a Biden administration official has said the president would not use his federal powers to block a strike.
A widespread and lengthy strike could cause shortages and cost increases across a broad range of industries.
Longshoremen, also referred to as stevedores, handle cargo from incoming ships. They mostly work on container ships, but also do some work with car carriers and cruise ships.
They operate cranes that pluck containers from ships to "lashing," securing cargo containers to prevent them from falling off during transit, and process paperwork.
Ports covered by the contract handled $37.8 billion US worth of vehicle imports during the 12 months that ended June 30, according to S&P Global Market Intelligence. Auto parts are also a key import on the East Coast and Gulf of Mexico, with shipments from Europe more difficult to reroute than those from China, logistics experts said.
The ports also lead the U.S. in shipments of machinery, fabricated steel and precision instruments, coming in at $97.4 billion, $16.2 billion and $15.7 billion US, respectively, S&P Global Market Intelligence data showed.
About 53 per cent of all U.S. waterborne agricultural imports, by volume, would be at risk from a strike. Over a one-week period, the potential value of those exports is estimated at $1.1 billion US, according to the American Farm Bureau Federation. For agricultural exports, that figure is $318 million US.
Three-quarters of the nation's banana imports from countries like Guatemala and Ecuador land at ports on the East and Gulf Coasts, said Jason Miller, interim chair of Michigan State University's department of supply chain management. The U.S. also imports coffee and cocoa in large volumes and exports cotton.
