NEW YORK/WASHINGTON, Oct 2 (Reuters) – A strike by 45,000 dockworkers halting shipments at East Coast and Gulf Coast ports entered its second day on Wednesday, with no negotiations currently planned between the involved parties, according to sources.
The International Longshoremen’s Association (ILA) strike update has disrupted the movement of goods ranging from food to automobiles across numerous ports from Maine to Texas, raising concerns about a potentially prolonged disruption that could cost the economy billions of dollars daily. President Joe Biden’s administration is urging U.S. port employers to present a better offer to dockworkers in order to resolve the strike.
“They made incredible profits, over 800% profit since the pandemic, and the owners are making tens of millions of dollars from this,” Biden remarked to reporters. “It’s time for them to sit at the table and get this strike done.”
While economists suggest that consumer prices will not rise immediately due to recent accelerated shipments of essential goods, they warn that an extended strike will eventually impact prices, particularly food costs, as noted by Morgan Stanley economists.
Packaged food manufacturer Conagra has proactively acquired ingredients and coordinated with suppliers for months in anticipation of the strike. CEO Sean Connolly stated, “If it becomes a protracted issue, it will be a bigger issue for everybody.” As of Tuesday, more than 38 container vessels were backed up at U.S. ports, compared to just three on Sunday, according to Everstream Analytics.
Newell Brands, known for its Crock-Pot products, reported that hundreds of containers filled with items manufactured in Asia are arriving at West Coast ports this week after being rerouted from the East Coast two to three months ago. The company acknowledged a minor backlog at West Coast ports but confirmed they are still operating at full capacity.
The ILA initiated the strike update on Tuesday following a collapse in negotiations with the United States Maritime Alliance (USMX) over a new six-year contract. The union is advocating for a $5-per-hour wage increase each year for six years and is also seeking to halt automation projects that they believe threaten union jobs.
“We are prepared to fight as long as necessary, to stay out on strike for whatever period of time it takes, to get the wages and protections against automation our ILA members deserve,” stated ILA leader Harold Daggett.
The Biden administration is urging USMX to improve its offer to dockworkers. Transportation Secretary Pete Buttigieg commented on the dispute, stating, “The companies need to put forward an offer that’s going to get the workers to the table. We actually think the parties economically are not as far apart from each other as they may think.”
USMX confirmed on Wednesday that they are eager to resume negotiations but are unwilling to agree to preconditions to return to bargaining. Biden has directed his team to monitor for potential price gouging that might benefit foreign ocean carriers but has reiterated that he will not intervene directly to end the strike.
Morgan Stanley economists indicated that while the strike could impact growth and inflation, these effects would only manifest if the stoppage persists. They noted that the implications for transportation would be limited unless the strike drags on. This strike, the ILA’s first major stoppage since 1977, is affecting 36 ports—including New York, Baltimore, and Houston—that handle a wide range of containerized goods, from bananas to clothing and cars. JP Morgan analysts estimate that the walkout could cost the American economy roughly $5 billion daily.
As the holiday season approaches, retailers, which account for about half of all container shipping volume, are implementing backup plans to mitigate the strike’s impact. Isaac Larian, CEO of MGA Entertainment, which produces Bratz brand dolls, noted that around 10% to 15% of holiday season toys have yet to arrive in the U.S. However, he believes inventories are generally well-stocked. Larian expressed greater concern about the spring of 2025, as products must be shipped by November or December—timelines that could be jeopardized if the strike continues.
The National Retail Federation, alongside 272 other trade associations, called on Biden’s administration on Wednesday to utilize federal authority to halt the strike, warning that the walkout could lead to “devastating consequences” for the economy.
