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No sooner had the month of October begun than East Coast dockworkers went on strike. Eleventh-hour negotiations between the International Longshoremen’s Association (ILA) and the United States Maritime Alliance (USMX) revealed some promise for a possible settlement, but in the end ILA members hauled out their signs and began picketing at ports up and down the East Coast and on the Gulf Coast.
Then, the strike came to a temporary end three days later on Thursday night. According to AP, the dockworkers and ports came reached a deal to suspend the strike until Jan. 15 to provide time to negotiate a new contract. The two sides reached a tentative agreement on wages. “Effective immediately, all current job actions will cease and all work covered by the Master Contract will resume,” the ILA and USMX said in a joint statement.
Right up until the strike started, both sides appeared to be fairly far apart on some of the most important issues that they were negotiating. For example, NPR says the ILA was asking for $5-an-hour wage increases every year for the length of the new ILA-USMX master contract (which will be put in place for six years). This would have equated to a 77% pay raise for members of the union, which also wants “absolute airtight language that there will be no automation or semi-automation” used at the ports.
As with any potential for supply chain disruption these days, the strike quickly began populating news headlines focused on which products might get harder to source as the strike rolled on. For example, last week NPR reported that the strike was impacting work at 14 different ports and reaches as far north as Boston and as far south as Miami, plus New Orleans and Houston.
“More than $2 billion worth of goods typically flow through these ports daily, from chemicals and clothing to bourbon and bananas,” NPR pointed out. “That includes more than half of all cargo containers coming into the U.S., or about a million containers a month.” It also includes more than three-quarters of the containers carrying exports (or about 327,000 per month).
A Ripple Effect
In “East Coast Port Strike: What Businesses Can Do To Mitigate Supply Chain Disruption,” SAP’s
Richard Howells wrote about the 45,000-person strike’s potential supply chain impacts. Because it involved major ports like New York, New Jersey and Savannah, he points out, the interruption of import and export activities could have led to delays in shipping schedules, increased transportation costs, and a bottleneck of imported and exported goods.
“Historically, strikes have had a ripple effect, causing widespread economic impacts that extend far beyond the immediate region,” Howells adds. “Industries such as retail, manufacturing, and agriculture could see inventory shortages and production delays due to the unavailability of critical components and raw materials. This disruption might force businesses to reassess and diversify their supply chains, seeking alternative routes and transportation modes to mitigate future risks.”
Shippers and carriers did take some proactive steps to avoid negative impacts from the strike. For example, NBC Los Angeles said several importers have “fractionally shifted" some of their allocations to LA and Long Beach in order to circumvent the strike’s impacts. As a whole, the work stoppage was expected to cost the U.S. economy between several hundred million and $4.5 billion per day.
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