Posted on 10/01/2024 2:58:52 AM PDT by Red Badger
Key Points
Approximately 50,000 ILA union longshoremen were walking off the job at East Coast and Gulf Coast ports from New England to Texas starting at 12:01 a.m. ET on October 1 after failing to reach an agreement with ports ownership on a new contract, the union’s first strike since 1977.
Between 43%-49% of all U.S. imports and billions of dollars in trade monthly move through the U.S East Coast and Gulf ports.
The International Longshoreman’s Association, the largest maritime union in North America, rejected an offer from the port management group USMX on Monday that included a wage hike over six years near 50%.
=================================================================
Billions in trade came to a screeching halt at U.S. East Coast and Gulf Coast ports after members of the International Longshoremen’s Association (ILA) began walking off the job after 12:01 a.m. ET on October 1. The ILA is North America’s largest longshoremen’s union, with roughly 50,000 of its 85,000 members making good on the threat to strike at 14 major ports subject to a just-expired master contract with the United States Maritime Alliance (USMX), and picketing workers beginning to appear at ports. The union and port ownership group failed to reach agreement by midnight on a new contract in a protracted battle over wage increases and use of automation.
In a last-ditch effort on Monday to avert a strike that will cause significant harm to the U.S. economy if it is lengthy — at least hundreds of millions of dollars a day at the largest ports like New York/New Jersey — the USMX offered a nearly 50% wage hike over six years, but that was rejected by the ILA, according to a source close to the negotiations. The port ownership group said it hoped the offer would lead to a resumption of collective bargaining.
The 14 ports where preparations for a strike have been underway are Boston, New York/New Jersey, Philadelphia, Wilmington, North Carolina, Baltimore, Norfolk, Charleston, Savannah, Jacksonville, Tampa, Miami, New Orleans, Mobile, and Houston.
New York Governor Kathy Hochul said in a statement issued shortly after midnight that “the first large-scale eastern dockworker strike in 47 years began at ports from Maine to Texas, including at the Port Authority of New York and New Jersey. In preparation for this moment, New York has been working around the clock to ensure that our grocery stores and medical facilities have the essential products they need.”
Rhetoric from ILA leadership has been aggressive in the weeks leading up to the strike, with ILA president Harold Daggett, who was a union member the last time it went out on strike in 1977, telling rank-and-file members — who unanimously voted to authorize a strike — in a recent video message, “We’ll crush them.”
In a video posted to an ILA Instagram account, Daggett addressed union workers at Maher Terminals in Elizabeth, New Jersey. “This is going down in history, what we’re doing here,” he said. “They can’t survive too long,” he added.
For now, it is the supply chain and U.S. economy which will take the immediate hit.
Shana Wray, principal solutions architect for supply chain intelligence firm FourKites, tells CNBC the strike comes at the worst possible time, with its impact on supply chain congestion to exacerbate the devastation left behind from Hurricane Helene.
“Helene caused ports to delay openings at the ports of Charleston and Savannah, as well as power losses at intermodal facilities in Savannah, Charleston, and Atlanta,” said Wray. “This created ocean, trucking, and rail carriers congestion across Southeast and Gulf ports.”
Logistics experts have told CNBC in recent months there has been an exodus of cargo from the East to West Coast, and companies moved up orders for peak shipping season due to the strike risk. Both economists and logistics executives say the impact of the strike depends on how long the work stoppage lasts.
“A disruption of a week or two will create some backlogs but the broader consequences will be minimal outside of a handful of very port-reliant areas, including Savannah,” said Adam Kamins, economist at Moody’s Analytics. “But anything longer will lead to shortages and upward price pressures,” he said.
The most significant issues would be faced by food and automobile industries, Kamins said, as they rely especially heavily on the ports that will be shut down. While a surge in inflation is highly unlikely even with a longer strike, even a modest reacceleration could create uncertainty and force the Federal Reserve to be more cautious about lowering interest rates, which would weigh on the overall outlook for job growth and investment.
A one-week strike could cost the U.S. economy $3.78 billion, according to an analysis by The Conference Board, and cause supply chain slowdowns through mid-November. In all, the ports threatened with strikes handle $3 trillion annually in U.S. annual international trade.
Many industries are preparing for major repercussions. Noushin Shamsili, CEO and president of Nuco Logistics, which specializes in pharmaceutical imports and exports, said the strike comes at a critical time for inventory replenishment for the pharma sector.
“Almost all of this industry is just on time,” said Shamsili. “Raw materials are being brought in to complete drug manufacturing. Medical supplies for clinics and hospitals are on these vessels. For a while importers did not bring in a lot of cargo because they were overflowing with supplies post-Covid. Now they have started reordering medical devices, gloves, syringes, and tubing.”
Shamsili also said the East Coast ports are a gateway for generic medicine made in India. Approximately 48% of the active pharmaceutical ingredients used in the U.S. are being imported from India. Without these APIs, medications cannot be produced. APIs are also manufactured in Europe, which also use the East Coast ports as U.S. points of entry.
Steve Lamar, CEO of the American Apparel and Footwear Association, said these ports are critical for the retailing industry. In 2023, the East and Gulf Coast ports accounted for 53% of all U.S. apparel, footwear, and accessories imports, he said, amounting to over $92 billion in value.
“The clock is ticking away,” said Lamar. “Each strike day yields five more days of disruption as our consumer-driven economy gets snarled in port backlogs right as we hit the heavy holiday shopping season. Both sides need to get back to the table and the administration must be ready to use all of its tools to make sure this happens. Reaching a fair, long-term, and sustainable deal is job No. 1 for all parties.”
Importers such as Walmart — the No. 1 importer across the affected ports — as well as other top importers including Home Depot, Ikea, Samsung, and LG Electronics will find few to no options to divert trade to Canada or the West Coast as other unions close ranks in support of the ILA’s labor battle.
These companies are among the leading importers at the 14 major ports that an ILA strike would impact, according to ImportGenius data.
The last time the ILA went on strike in 1977 the ILWU union at West Coast ports supported it by allowing ILA members to go to the Port of Los Angeles to stop the unloading of diverted vessel. ILA president Daggett, who was involved in those actions as a young union member, recently cited this historical example in communications with the rank-and-file.
The ILA has also made clear that all of its members, including those not subject to the expired contract, will be closing ranks. “You can be sure the ILA’s 85,000 members will be supporting their Sisters and Brothers,” James McNamara, spokesman for the ILU, recently told CNBC.
The Teamsters issued a statement on Monday night from its president Sean O’Brien saying it stood “100%” with the ILA in the fight for a new contract and reminding its members that Teamsters do not cross picket lines. “The ocean carriers are on strike against themselves after failing to negotiate a contract that recognizes the value of these workers,” O’Brien stated, and he added some harsh words about any effort by the federal government to interfere in the labor action.
The National Retail Federation has said items on the vessels en route for October 1 arrival and after are restocking items for the holidays as well as just-in-time products like auto parts and pharmaceuticals.
Between 43%-49% of all U.S. imports and billions of dollars in trade monthly are now caught up in the failed talks over a new union contract, which broke down in June amid allegations from the ILA that ports were violating rules related to use of automation.
The White House has engaged senior officials including Secretary of Transportation Pete Buttigieg, Acting Secretary of Labor Julie Su, and Director of the National Economic Council Lael Brainard since late last week in an effort to bring the ILA and USMX back to the bargaining table to negotiate a deal quickly.
Late in the day on Monday, USMX put out a statement saying within the past 24 hours it had traded counter offers with the union, including an offer to increase wages by nearly 50% over six years, triple employer contributions to employee retirement plans, strengthen health care options, and retain the current contract language around automation and semi-automation.
The union had already said in statement issued at 11 a.m. ET on Monday that “the Ocean Carriers represented by USMX want to enjoy rich billion-dollar profits that they are making in 2024, while they offer ILA Longshore Workers an unacceptable wage package that we reject.” The statement added that the union saw the USMX as “intent on causing a strike at all ports from Maine to Texas beginning in almost 12 hours.”
The Biden administration finds itself in a delicate political moment, with the presidential election one month away and President Biden vowing he will not use existing labor law to force union workers back on the job, which is within his powers under the Taft-Hartley Act.
The Taft-Hartley Act, passed in 1947, was a revision of U.S. law governing labor relations and union activity that granted a U.S. president the power to suspend a strike for an 80-day “cooling off period” in cases where “national health or safety” are at risk.
The White House has reiterated its position several times in recent days that “We’ve never invoked Taft-Hartley to break a strike and are not considering doing so now.”
Cruise operations and military operations at ports will continue.
Ahh, the security of a well-stocked food pantry.
...disrupting the supply chain while Appalachia is trying to recover from life-changing floods...bastards! Enjoy Hell.
Halt supplies and surrender to whoever ?
...except for those of us whose pantries were erased in a fw minutes by The Flood.
It will be interesting to see how the brainless among us who go the grocery store in a week or so and shelves in many areas are empty and the prices on many other things have gone up.
Exactly! Selfish people thinking only of themselves…the new American way.
Biden/Harris stand in solidarity with the Unions.
The Tate Hartley Act should be invoked. Our economy is teetering on recession.Arms supply to our allies? Forgedabowdit!
Trump would never have let the issues get this far, the problem would have been solved early.Biden is on the beach.....playing pudding pud with Jill.Harris is too busy grooming her word salads. Such incompetence.
Seriously, they’ll blame maga and “capitalism “.
Suspend ALL foreign aid RIGHT NOW...Americans are trying to rebuild in the Appalachia.
BTTT
And you’re named after a Psalm lol?
Their eyes stand out with fatnass, they have more than they can wish..
Hey, like a person who is thrilled that they have plenty to eat while others are dying AND likely soon starving after a devastating hurricane and now the strike.
That Psalm is for you! :)
Right on...my wife and I were well-stocked last Thursday night...it was ALL GONE the next morning. God can change your life in a minute.
A bit self-righteous there, consider this verse
Genesis 41:35
Then let them gather all the food of these good years that are coming, and store up the grain for food in the cities under Pharaoh’s authority, and let them guard it.
There is nothing wrong with storing resources as a preparation against troubled times.
Being compassionate and giving to those in need does not mean one must do so such that you become dependent as well and can not provide for you and your family with the resources the Lord gives you.
Also consider Christ’s words here:
Matthew 15:4For God said, ‘Honor your father and mother’ and ‘Anyone who curses his father or mother must be put to death.’ 5But you say that if anyone says to his father or mother, ‘Whatever you would have received from me is a gift devoted to God,’ 6he need not honor his father or mother with it. Thus you nullify the word of God for the sake of your tradition.…
“Suspend ALL foreign aid RIGHT NOW”
Off the current strike topic - suspend ALL foreign aid period and permanently until we have a balanced budget.
The folks who own the ports and points of entry have endorsed Biden. The globalist puppet masters will not hurt them.
The union members are largely MAGA
Mebe Mayor Pete can get those illegals to don their backpacks and move goods over the border then around the Country.....
77% raise.. insane. To bad Reagan wasn’t still alive, they’d all be fired.
Hey, I've got a family to provide for - I'm not a communist, this is MY responsibility.
And you have no idea how much time and treasure I pour in to those less fortunate than me.
Try pulling that plank ouit of YOUR eye, brother.
And bring all of our major ports under AMERICAN control.
Why is nobody looking at who runs our major ports.
Disclaimer: Opinions posted on Free Republic are those of the individual posters and do not necessarily represent the opinion of Free Republic or its management. All materials posted herein are protected by copyright law and the exemption for fair use of copyrighted works.