Dockworkers' Strike at U.S. Ports: Economy and Politics in Tension

Harold Daggett, Chairman of the International Longshoremen's Association (ILA), hinted that his harsh stance against automation is causing his negotiating partners to blanch. The ILA is on the brink of the first strike at the East and Gulf Coast ports in the US since 1977, intensifying concerns over economic disruptions. Daggett resolutely declared on Tuesday before picketers at the Port of New York and New Jersey: "You are making history!" Amid these tensions, the ILA is leveraging the upcoming holidays and the heated presidential election as a bargaining chip against the United States Maritime Alliance, the association of ship owners and port operators. As the first day of the strike progresses, economists are attempting to quantify the damage caused by disruptions in the supply chain, resulting from the closures of major maritime trade routes from Boston to Houston. Estimates range from $1 billion to $5 billion per day in delayed or lost economic activity. Politically, the strike comes at a delicate moment, just five weeks before a tight presidential election. Democrats and Republicans are grappling with the implications: On one hand, they risk alienating voters who support higher wages and job security. On the other hand, interventions to ease the economic pressures could erode support from the labor base. So far, President Joe Biden has not taken any action to persuade the union to resume negotiations, despite growing pressure from business groups. House Speaker Mike Johnson warned: "Even a single day of halted operations will have devastating economic impacts. American families will feel the effects in the form of higher prices, empty shelves, and losses in economic performance." Economists view the strike more as a slow tremor than a sudden shock. Ships unable to unload their cargo will anchor and wait, reducing transport capacity during the holidays and driving prices up. John Wrenn, COO of Manhasset, New York-based beer, wine, and spirits distributor MHW Ltd., expressed concern about delivering goods in time for the holiday season. Shipping costs have recently increased by 30 to 40 percent. Alternatives via the West Coast are currently unfeasible, and air freight is too costly. J.M. Smucker Co., the maker of peanut butter and jelly, is making preparations to maintain supply chains, including evaluating routes on the West Coast. However, in the case of a prolonged strike, the impacts will need reassessment. Automakers like Toyota, General Motors, and Ford have already activated contingency plans to avoid supply shortages. Toyota is building up additional inventories. Airbus has also taken measures to mitigate potential impacts on its operations in Mobile, Alabama. Scott Hunter of Palmetto Outdoor Kitchens in South Carolina is concerned about potential delays in the delivery of granite slabs, a central component for his outdoor kitchens. The strike could overload transport routes and further strain logistics. Harold Daggett finally expressed global ambitions to fight against port automation. He plans to mobilize international dockworkers to challenge operators who seek to implement automation. A potential global strike is implicated, which could halt international operations. "And when we have a contract, I will go to Portugal and get every union member in shipping to stand against automation. If it comes to Chile, we will strike worldwide for three weeks.