ILA Longshoremen Strike at East and Gulf Coast Ports

ILA Longshoremen Strike at East and Gulf Coast Ports

The International Longshoremen’s Association (ILA) members at East and Gulf Coast ports left the job at 12:01 AM ET.

The strike concerns an expired “master contract with the United States Maritime Alliance (USMX).”

From CNBC:

In a last-ditch effort on Monday to avert a strike that will cause significant harm to the U.S. economy if it is lengthy — at least hundreds of millions of dollars a day at the largest ports like New York/New Jersey — the USMX offered a nearly 50% wage hike over six years, but that was rejected by the ILA, according to a source close to the negotiations. The port ownership group said it hoped the offer would lead to a resumption of collective bargaining.

The 14 ports where preparations for a strike have been underway are Boston, New York/New Jersey, Philadelphia, Wilmington, North Carolina, Baltimore, Norfolk, Charleston, Savannah, Jacksonville, Tampa, Miami, New Orleans, Mobile, and Houston.

The longshoremen haven’t gone on strike since 1977.

"I will cripple you, and you have no idea what that means. Nobody does."

Harold Dagget, Chief Negotiator for the International Longshoremen Association, threatens to cripple the US economy with IMMINENT port strike.

In a recent interview, Harold explains the impact of what will… pic.twitter.com/ImySIQrXoy

— Brother Mikey (@BrotherMikeyX) September 30, 2024

The union exempted cruise ships and military cargoes.

However, the strike will likely disrupt the supply chain:

Those ports collectively handle about half of U.S. imports and are also critical hubs for exports from American businesses.

Imports of cars and auto parts, agricultural products like bananas, machinery, fabricated steel, furniture, apparel and more will be affected. East and Gulf Coast ports also handle significant percentages of exported cars and auto parts, pharmaceutical products, beef, pork, poultry, eggs, wood, plastics and other products or commodities.

An analysis by J.P. Morgan estimated the daily cost of a port strike by East and Gulf Coast port workers would cost the U.S. economy between $3.8 billion and $4.5 billion per day as operations slow.

President Joe Biden announced he wouldn’t use the Taft-Hartley Act to intervene.

The law would allow Biden to “take action that results in an 80-day ‘cooling off’ period for negotiations to resume while workers are back at work.”

The U.S. Chamber of Commerce wanted Biden to invoke the law to “protect our economy.”

Hurricane Helene already closed ports.

Companies anticipated the strike. Those in charge moved shipping orders to the West Coast, especially since the holiday season is coming up:

Logistics experts have told CNBC in recent months there has been an exodus of cargo from the East to West Coast, and companies moved up orders for peak shipping season due to the strike risk. Both economists and logistics executives say the impact of the strike depends on how long the work stoppage lasts.

“A disruption of a week or two will create some backlogs but the broader consequences will be minimal outside of a handful of very port-reliant areas, including Savannah,” said Adam Kamins, economist at Moody’s Analytics. “But anything longer will lead to shortages and upward price pressures,” he said.

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