Early Tuesday morning, dockworkers at ports across the U.S. launched a strike over wages and automation concerns, potentially causing supply shortages and increasing inflation. The strike, involving 36 ports from Maine to Texas, marks the first walkout by the International Longshoremen’s Association (ILA) since 1977, despite progress in contract negotiations.
The ILA began negotiations with a proposal for a 77% pay increase over a six-year period, arguing that it was needed to offset years of minimal raises and inflation. On Monday evening, the U.S. Maritime Alliance, representing the ports, countered with a 50% raise over six years, along with promises to maintain existing limits on automation, although the union is demanding a complete ban on port automation.
The alliance’s offer also included tripling employer contributions to retirement plans and expanding healthcare options. Despite this, ports began shutting down operations on Monday in anticipation of the strike.
Experts have warned that while U.S. consumers may not feel the immediate effects due to retailers’ current stock levels, prolonged strikes could delay holiday shipments, create supply shortages, and drive up prices. The strike is expected to have an immediate impact on perishable goods like produce, and may cause congestion at ports as vehicles and goods back up.
Jay Dhokia, founder of supply chain management firm Pro3PL, said, “If the strikes go ahead, they will cause enormous delays across the supply chain, a ripple effect which will no doubt roll into 2025 and cause chaos across the industry.”
JP Morgan estimated the economic cost of the strike could reach between $3.8 billion and $4.5 billion per day.
On Sunday, President Joe Biden said he did not plan to intervene in the strike, though under the Taft-Hartley Act, he has the authority to temporarily halt it by imposing an 80-day cooling-off period. Earlier on Monday, Commerce Secretary Gina Raimondo, speaking on CNBC, said she was not focused on the potential strike, despite its threat to disrupt supply chains and increase consumer costs.