A port strike is coming: what you need to know and what to expect

An East Coast dockworker strike looms this week as time runs out to reach a labor agreement.

If an agreement is not reached by the end of Monday, thousands of longshoremen could go on strike on Tuesday, October 1, which could pose a huge economic burden to retailers ahead of the peak holiday shopping season.

Here’s what you need to know about the labor dispute and the effects of a potential strike:

Labor dispute

Associated longshoremen in the International Longshoremen’s Association (ILA), which represents 45,000 members in East Coast and Gulf ports, could go on strike from Tuesday, October 1, if no agreement is reached by the end of Monday.

If an agreement is not reached, 36 ports stretching from Maine to Texas face closure.

Much of the labor dispute involves the introduction of new technologies to U.S. ports that workers say could ultimately result in job losses. The union demands a complete ban on the automation of cranes, gates and the movement of containers when loading and unloading goods, as well as significantly higher wages.

The West Coast longshoremen belong to a different union and are not participating in the strike.

According to the Associated Press, the U.S. Maritime Alliance, which represents shippers and ports, and the ILA have not met since June and no talks are scheduled.

“ILA unity remains strong and growing,” James McNamara, spokesman for the International Longshoremen’s Association, said in a statement Sunday. He said the union would inform the public of any new developments by 11 a.m. on Monday.

What would happen if dock workers went on strike?

A longshore strike would impact operations at 36 U.S. docks, severely limiting the number of goods entering and leaving the country.

Retailers will be the first to feel the effects of the strike, and consumers may certainly start to see the effects of the strike themselves when shopping.

Big picture

A potential strike would affect nearly half of all containers moving through U.S. ports and would affect five of the 10 busiest ports in North America, reported Maritime Directormaritime industry magazine and newsletter.

“Everyone from shipping lines to trade groups and maritime industry analysts are also warning of widespread consequences across the global supply chain. Sea-Intelligence estimated that for each day of the strike it would take four to six days to clear the backlog. wrote that even a two-week strike could have consequences in 2025.” Maritime Board the report continued.

FOX Business reported that JP Morgan estimated the strike would cost the U.S. economy as much as $5 billion a day.

President Joe BidenThe team doesn’t see a potential strike as necessarily disruptive to the economy in the short term, as retail inventories have surged as companies plan for a contract dispute, FOX Business reports.

The federal government also has additional tools to monitor supply chains that it lacked during the Covid-19 pandemic, when long wait times at ports and higher shipping costs drove up inflation.

Some companies using the affected ports had previously imported goods or redirected them to the West Coast, Reuters reported.

In stores

Several experts told FOX Business that these types of disruptions in transportation and supply chains often lead to product shortages, which drives up prices.

Discretionary products, particularly luxury and leisure, are expected to suffer the most due to their high price elasticity, Jason Fisk, CEO of SalSon Logistics he told FOX Business.

Some items may also arrive too late for the peak holiday shopping season.

White House intervention

Top Biden administration officials met with port operators on Friday ahead of a possible strike to encourage negotiations, according to a White House official who spoke anonymously to The Associated Press.

Presidents have the power to intervene in labor disputes that pose a threat to national security or safety. Under the Taft-Hartley Act, Biden can ask a court for an injunction to suspend the strike for an 80-day grace period. White House spokeswoman Robyn Patterson said in a statement that the administration has never invoked the law and is not considering it now.

Biden insisted by the National Retail Federation and 177 industry groups representing retailers, manufacturers, farmers, automakers and truck drivers to facilitate negotiations and prevent disruption.