The International Longshoremen's Association (ILA), which represents dockworkers on the U.S. East and Gulf coasts, has gone on strike, halting shipping to nearly half the nation’s ports.
The union’s contract with the U.S. Maritime Alliance (USMX), which manages the ports, expired on 30 September, and despite negotiations, no agreement was reached to renew it.
The ILA’s demands include progressive pay raises in line with record profits shipping companies made during the pandemic. In a statement , ILA President Harold Dagget placed the blame for the failed contract negotiations on the USMX.
“USMX brought on this strike when they decided to hold firm to foreign-owned ocean carriers earning billion-dollar profits at U.S. ports but not compensate the American ILA longshore workers who perform the labor that brings them their wealth,” he said.
Another demand includes a ban on processing automation, which is increasingly threatening workers’ jobs, according to the ILA. Contract negotiations had previously broken down in June of this year when the union claimed some companies were using an unapproved automated gate system to process trucks without human labor.
J.P. Morgan has estimated that the strikes could cost the country between USD 3.8 billion and USD 4.5 billion (EUR 3.4 billion and EUR 4.1 billion) a day, though some of those large losses will likely be recovered when the strike ends.
Shipping and logistics experts have said a short strike should not cause much disruption, but the seafood sector is likely to be one of the areas of the U.S. economy which feels strike-related disruptions first.
Large U.S. importers have been rushing cargo into West Coast ports and securing storage for goods in expectation of the stoppage. This demand has prompted higher shipping and storage costs, which have already disproportionately affected smaller traders and those who depend on perishable goods, like seafood distributors.
“The first thing that’s going to be impacted is our fresh produce, fresh seafood. About USD 17 billion [EUR 15.4 billion] worth of fresh seafood come through these ports,” American Farm Bureau Federation Economist Danny Munch said, according to NBC Boston. “Those are all very perishable products. They can't just sit in a container forever.”
Up to 60 percent of U.S.-consumed seafood is imported, and much of it comes through the ports of Boston and New York, where fresh fish is quickly processed and shipped through nearby airports.
ILA leadership has rejected responsibility for any consumer cost spikes that arise from the strike.
“The shippers are gouging their customers that result in increased costs to American consumers. They are now charging USD 30,000 [EUR 27,000] for a full container, a whopping increase from USD 6,000 [EUR 5,400] per container just a few weeks ago,” Dagget said. “It’s unheard of, and they are doubling their USD 30,000 fee, stuffing the same container from multiple shippers. They are killing the customers.”
U.S. President Joe Biden has affirmed he would not use the powers of the Taft-Hartley Act, which allows a president to request a court-ordered 80-day pause in strike actions that endanger national health and safety, to force a return to work.
Pressure on the president to intervene will likely intensify, though, as a number of trade groups, including the National Association of Wholesaler-Distributors (NAW), National Retail Federation, and the National Association of Manufacturers, have called for the president to stop the strike, citing the economic damage it will likely cause, especially to small and mid-sized businesses.
New York state officials estimated around 100,000 shipping containers are now stranded in New York City ports, and that around 36 cargo ships will have to remain at anchorage outside the city awaiting the strike's end so they can dock and unload.
