Strike closes eastern US and Gulf ports, threatening economy – San Bernardino Sun

By Laura Curtis | Bloomberg

Dockworkers abandoned all major ports on the U.S. East and Gulf coasts for the first time in nearly 50 years, staging a strike that could disrupt the world’s largest economy and cause political unrest just weeks before the election. presidential.

The 36 affected ports have the combined capacity to handle up to half of all U.S. trade volumes, and the closures immediately halt container operations and auto shipments. Power supply and bulk cargo will not be directly affected. Some exceptions will be made to allow the movement of military goods and cruise ships.

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The significance of a work stoppage at all major container ports from Houston to Miami to New York-New Jersey depends on how long the strike lasts. The economic loss from the shutdown, which began at 12:01 a.m. Eastern Standard Time Tuesday, will be between $3.8 billion and $4.5 billion a day, according to JPMorgan Chase & Co.

Shipping congestion resulting from a week-long strike would take about a month to clear, according to Grace Zwemmer of Oxford Economics.

The International Longshoremen’s Association is seeking higher wages and a rollback of automation language in a six-year contract that expired at midnight. Union leader Harold Daggett has for months threatened a strike starting October 1 if a deal is not reached by the deadline. The last time East and Gulf Coast dock workers went on strike was in 1977.

“We are prepared to fight for as long as necessary, to remain on strike for as long as necessary,” Daggett said in a statement posted on Facebook. The companies’ latest offer “falls far short of what ILA rank-and-file members are demanding in terms of wages and protections against automation.”

Ocean carriers and terminal operators represented by the United States Maritime Alliance, also known as USMX, have accused the ILA of refusing to negotiate since the union suspended talks in June. A strike was all but certain until Monday afternoon, when reports emerged that the White House had been in communication with both sides over the weekend and some progress had been made on pay.

President Joe Biden, who prides himself on being pro-union, has said the dispute is a collective bargaining issue and that he would not invoke his authority under national security laws to order longshore workers to return to ports while negotiations continue. .

Trade, transportation and retail industry groups have been urging the White House to intervene to limit the damage from the strike. Container shippers are preparing to impose surcharges linked to the disruption, raising the total cost of shipping.

2.1 billion dollars a day

“It would be unconscionable to allow a contract dispute to inflict such a shock on our economy,” Suzanne Clark, executive director of the U.S. Chamber of Commerce, wrote in a letter to Biden on Monday.

“Taft-Hartley would give both sides in the negotiation time to reach an agreement on a new labor contract,” Clark continued, referring to the 1947 congressional law that allows a president to intervene in labor disputes involving national security.

Estimates from the National Association of Manufacturers show that the strike endangers $2.1 billion in daily commerce, and the total economic damage could reduce GDP by up to $5 billion a day. NAM President and CEO Jay Timmons urged Biden to force the resumption of operations while negotiations continue.

“The president can protect manufacturers and consumers by exercising his authority, and we hope he will act quickly,” Timmons said in a statement Monday night.

The Teamsters union issued a statement Monday urging the Biden administration to stay out of the dispute. ILA leader Daggett warned the White House not to intervene and said that if forced to return to ports, dockworkers would handle fewer containers than usual, slowing operations.

The union has not endorsed any presidential candidates, although according to Daggett, former President Donald Trump “pledged to support the ILA in its opposition to automated terminals” during a meeting at Mar-a-Lago last fall. Neither Trump nor Vice President Kamala Harris have drawn public attention to the strike threat.

“Moments ago, the first large-scale strike by Eastern dockworkers in 47 years began at ports from Maine to Texas, including at the Port Authority of New York and New Jersey,” said New York Governor Kathy Hochul. in a statement shortly after midnight.

“In preparation for this moment, New York has been working around the clock to ensure our grocery stores and medical facilities have the essential products they need,” he said.

Meanwhile, the flow of goods has already been redirected by the threat of disruption. Many importers brought their products in early or through West Coast ports to mitigate risk and increase inventories.