The shipping industry is at edge over the situation surrounding the strike by U.S. East and Gulf Coast port workers could disrupt container traffic from Maine to Texas.
According to Reuters, the International Longshoremen’s Association (ILA), representing approximately 45,000 port workers, has been engaged in tense negotiations with the United States Maritime Alliance (USMX) over a new labor contract that expired on 30 September.
The negotiations have reached an impasse, primarily centered around wage increases, with the USMX recently offering a nearly 50% raise in wages, alongside improved retirement contributions and healthcare options. ILA has labeled this proposal as “unacceptable” and is poised to initiate a strike starting at 12:01 a.m. ET on October 1st. As a result, Members of the ILA walked out on Tuesday at 14 major ports along the east and gulf coasts, halting container traffic.
The strike could have severe repercussions for the U.S. economy, potentially costing an estimated $5 billion per day in lost shipments of essential goods, including food and automobiles, according to JP Morgan’s estimations.
Major ports, such as those in New York, Baltimore, and Houston, are set to experience significant disruptions as marine terminals prepare to close, leaving nearly 100,000 containers stranded, Reuters notes.
Although port workers have assured that military cargo and cruise ship traffic will not be affected, the broader implications for supply chains are alarming. A few days ago, Xeneta warned that ripple effects of strike action at ports on the US East and Gulf coasts will cause severe supply chain disruption into 2025.
The Biden administration has remained cautious, refraining from invoking the Taft-Hartley Act, which would enable presidential intervention in labor disputes deemed a national emergency.
This is the first time ILA goes on strike since 1977.
