American ports: dock workers go on strike, which may reignite inflation

PHILADELPHIA (AP) — From Maine to Texas, dock workers are working at 36 ports across the eastern United States They are on strike For the first time in decades, a work stoppage may occur Interconnected supply chains It causes shortages and higher prices if it continues for more than a few weeks.

Workers began walking picket lines early Tuesday Strike over wages and use of ports for automationAlthough some progress has been reported in negotiations for a new contract. The current contract between the ports and about 45,000 members of the International Longshoremen’s Association expired at midnight.

The strike comes just weeks before A Tight presidential elections It could become a factor in the race if the shortage begins to affect many voters.

In an early sit-in, workers outside the Port of Philadelphia marched in a circle and chanted, “No work without a fair contract.” The union, striking for the first time since 1977, placed message boards on the side of one truck saying: “Automation hurts families: ILO advocates for job protection.”

Boise Butler, president of the local union, emphasized that workers want a fair contract that does not allow their jobs to be automated. He said shipping companies made billions during the pandemic by charging high prices.

“Now, we want them to pay what they asked for,” Butler said. They will pay.”

He warned that the union was planning to strike as long as it needed to achieve a fair deal and have valuable influence over companies.

“This is not something you start and stop,” Butler said. He added: “We are not weak,” pointing out the union’s vital importance to the country’s economy.

In Port Houston, at least 50 workers began a sit-in around midnight local time carrying signs saying: “No work without a fair contract.”

The US Maritime Alliance, which represents the ports, said Monday evening that both sides had made some concessions on their previous wage demands. But no agreement was reached.

Labor experts point out that striking workers may have the upper hand in the confrontation. The union’s most recent contract with the coalition was negotiated before the COVID-19 pandemic. Factors ranging from the effects of inflation and increased workloads from pandemic-era demands to a more generous contract achieved by dockworker counterparts on the West Coast have strengthened their position to demand higher wages, better workplace protections and a slowdown in the automation of labor functions.

“This is a very good time,” said William Brocher, an assistant professor of labor studies and labor relations at Rutgers University.

Brocher noted that although inflation is falling, the cost of living is still much higher than it was before Covid-19, which means the purchasing power of workers’ wages is shrinking.

Brocher also pointed to the momentum generated by other labor activism in recent years, as unions across industries have demanded more and seen companies offer concessions as a result. And the contract agreement concluded last year with West Coast dock workerswho are represented by a different union, explain that “higher wages are certainly possible” for stevedores, and their bargaining power has been strengthened.

In a statement issued early Tuesday, the union said it rejected the coalition’s latest proposal because it “falls far short of what ILO members are demanding with regard to wages and protection from automation.” The two sides have not held formal negotiations since June.

Supply chain experts say consumers will likely not feel any consequences from the strike immediately. In anticipation of the strike, most major retailers have stockpiled merchandise and are moving ahead with shipments of holiday gifts. But if the downtime lasts more than a few weeks, consumers may feel the effects.

If the strike continues, it will likely cause some merchandise to arrive late in the peak holiday shopping season Disable delivery of anything From toys and artificial Christmas trees to cars, coffee and fruits. The strike is likely to have an almost immediate impact on supplies of perishable imports such as bananas. Ports affected by the strike handle 3.8 million metric tons of bananas each year, or 75% of the country’s supply, according to the American Farm Bureau Federation.

Although consumers may face higher prices for some of these items over time, businesses will likely take hits sooner. In addition to paying the costs of delay, competition to keep prices relatively low or stable may result in some affected companies incurring additional costs.

Jay Foreman, CEO of Basic Fun, which makes toys like Care Bears and Lincoln Logs, said he has been monitoring the port situation for months and planning by diverting all container shipments to West Coast ports. But he said the shift added 10% to 20% of additional costs his company would have to absorb.

Foreman added that Basic Fun prices for the next 10 months are locked in with retailers, but he may have to raise prices during the second half of 2025 if the strike is prolonged.

“We were expecting a good holiday season, but now these additional costs will eat into profits,” he said. “It affects raises and bonuses.”

A strike could also disrupt exports from East Coast ports and create traffic jams at West Coast ports. Railroads say they can move to move more freight from the West Coast, but analysts say they cannot move enough to compensate for the closed eastern ports.

JPMorgan estimated that a strike that shuts down East Coast and Gulf Coast ports could cost the economy between $3.8 billion and $4.5 billion per day, with some of that recovering over time after normal operations resume.

Retailers, auto parts suppliers and product importers had hoped a settlement would be reached or President Joe Biden would do so Intervene and end the strike Using the Taft-Hartley Act, which allows him to have an 80-day cooling-off period.