There’s a storm brewing that may ruin your holidays.
On October 1st some
45,000 dock workers at 36 different US East & Gulf Coast ports are expected
to go
on strike, shutting down almost half of all US imports by sea. The effect of such a strike has been predicted
to be “cataclysmic”,
disrupting the global supply chain.
Remember post-COVID when store
shelves were empty, construction delayed, pharmaceuticals in short supply and
auto production disrupted? Online orders
were delayed and prices soared.
That could happen again,
affecting not only you but the rest of the world. The economic effects would measure in the
billions of dollars a day. Even a one
day strike would take five days to recover from. If a strike lasts a week, the cleanup would
last until mid-November. If it drags on
for a month, well, we don’t even want to contemplate that.
Though West Coast ports would remain open if there’s a strike (different unions), there’s no way they could handle ships diverted from the East. They just don’t have the capacity.
What kind of imports will be affected? Think food, crude oil, electronics, clothing
and, yes, holiday gifts.
Anticipating this strike, shippers
have been in a mad dash to boost shipments in recent months. Imports are up almost 13% recently as
companies try to build inventories before the ports are closed down. That’s led to a huge backlog of empty
shipping containers at US ports which, if they don’t get back to their homes,
will mean further delays even after a settlement.
The principles in this
standoff are the International Longshoremen’s Assoc (ILA) and the US Maritime
Alliance (USMX). The union hasn’t had a
new contract in six years and is seeking a 40% wage boost. But their bigger concern is automation.
Understandably, the ILA is worried about its members losing their jobs.
In advanced ports like
Rotterdam, Singapore and Qingdao (China) the loading and offloading of
containers and their transfer within the port is handled by computers. The US unions claim that isn’t safe.
ILA members make good
money: $39 an hour, or just over
$81,000 annually. But with benefits and
overtime, some NY dockworkers can make $200,000, often working 100+ hours a
week.
Port Elizabeth NJ
The ports’ management, USMX,
is made up of port operators and the world’s
biggest shipping companies. Their
interests are in lowering costs and speeding up the operations.
The problem is, we’re about a
week away from the strike deadline and the ILA and USMX aren’t talking. They haven’t even met for negotiations in
months.
The White House has so far
refused to intervene. If the strike is
found to endanger national health or safety, the President could invoke the 1947
Taft-Hartley Act and impose an 80-day cooling off period. But the pro-union Biden White House says that
won’t happen. Instead they urge both
sides to negotiate.
In election years pundits
always say “watch for an October surprise”, some unexpected event that changes
everything. A dock workers strike on
October 1st could be exactly that, though it won’t be much of a surprise.
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