NEW YORK/WASHINGTON, Oct 2 (Askume) – A strike by 45,000 longshoremen entered a second day on Wednesday, halting shipments at U.S. East Coast and Gulf Coast ports, and there are no talks currently scheduled between the two sides, sources told Askume.
Due to the lack of progress, those who depend on transport fear the disruption could last for a long time.
The strike by the International Longshoremen’s Association union has blocked the movement of everything from food to cars at dozens of ports from Maine to Texas , and analysts warn it will cost the economy billions of dollars a day.
President Joe Biden ‘s administration has pressured US port employers to increase their offer to reach a deal with dockworkers to end the strike.
“They’ve made incredible profits of over 800% since the start of the pandemic, and the owners have made hundreds of millions of dollars off of it,” Biden told reporters on Wednesday. “It’s time to strike.”
Economists said the strike will not initially raise consumer prices because companies have ramped up shipments of key items in recent months. However, economists at Morgan Stanley said food prices are likely to be the first to respond as the prolonged shutdown eventually dissipates.
Sean Connolly, chief executive of packaged food maker ConAgra (CAG.N), said on Wednesday that the company had already purchased materials and had been working with suppliers for months to prepare for the strike. “If this becomes a prolonged problem, it will be a big problem for everybody,” he said.
As of Tuesday, more than 38 container ships were anchored at U.S. ports, compared with just three on Sunday before the strike, according to Everstream Analytics.
Hundreds of containers filled with products made in Asia from crock-pot maker Newell Brands NWL.O arrived at West Coast ports this week after being rerouted from the East Coast 2-3 months ago.
The company said West Coast ports are “a little bit backed up” but are still operating at full capacity.
The ILA, which represents 45,000 port workers, began the strike on Tuesday after negotiations failed for a new six-year contract with the United States Maritime Alliance (USMX). The union demands a $5/hour pay increase each year for six years.
Its leader, Harold Daggett, is also seeking an end to automation projects that he believes threaten union jobs.
“We are prepared to fight for as long as necessary, no matter how long it takes, and we will not go on strike to protect our ILA members from pay cuts and against automation,” Daggett said Tuesday.
The Biden administration wants USMX to offer a more generous package to dockworkers.
Transportation Secretary Pete Buttigieg weighed in on the controversy Wednesday.
“Companies need to make an offer that brings workers to the negotiating table,” Buttigieg said. “We actually think the two sides are not as far apart economically as they think.”
USMX said on Wednesday that they are focused on resuming negotiations, but they “cannot agree on preconditions” for returning to talks.
The White House said Biden directed his team to monitor price hikes that could benefit foreign ocean carriers. He has repeatedly said he would not intervene to end the strike.
Economists at Morgan Stanley said in a note late Tuesday that strikes could hurt economic growth and raise inflation “but only if they persist,” noting that as long as the strikes last, the impact on transportation should be limited.
The strike, the ILA’s first major shutdown since 1977, affected 36 ports, including New York, Baltimore and Houston, which handle a range of containerized goods from bananas to clothing and cars. Analysts at JPMorgan estimate the strike could cost the U.S. economy about $5 billion a day.
Backup Plan
Retailers, which account for about half of all container shipments, said they were implementing backup plans to minimize the impact of the strike as they enter the winter holiday selling season.
Isaac Larian, the chief executive of MGA Entertainment, which makes Bratz-branded dolls, said about 10% to 15% of holiday toys had not yet been shipped to the United States, but otherwise inventory should be adequate. He said he was more worried about spring 2025 because products have to be shipped in November or December, and those dates would be in jeopardy if the strike continues.
The National Retail Federation joined 272 other trade associations on Wednesday in calling on the Biden administration to use federal power to stop the strike, saying it could have “devastating consequences” for the economy.
