Port Strike Called At East And Gulf Coast Cargo Facilities As Dockworkers Walk Off The Job

Thousands of dockworkers at ports from New England to Texas went on strike just after midnight on Tuesday as they rally for higher pay and more job security.

The work stoppage, the first at East and Gulf Coast ports since 1977, follows a lengthy impasse in labor talks between the International Longshoremen's Association (ILA) and the United States Maritime Alliance (USMX), a shipping industry group representing terminal operators and ocean carriers.

The strike was expected to involve 25,000 workers, according to USMX, and close 14 ports: Baltimore; Boston; Charleston, South Carolina; Jacksonville, Florida; Miami (USMX groups Port Everglades in Ford Lauderdale, Florida, with the Port of Miami); Houston; Mobile, Alabama; New Orleans; New York/New Jersey; Norfolk, Virginia; Philadelphia; Savannah, Georgia; Tampa, Florida; and Wilmington, Delaware.

"USMX brought on this strike when they decided to hold firm to foreign-owned ocean carriers earning billion-dollar profits at United States ports, but not compensate the American ILA longshore workers who perform the labor that brings them their wealth," ILA President Harold Daggett said in a statement posted on social media. "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."

The ILA is demanding sizable wage hikes and a complete ban on the use of automated cranes, gates and container-moving trucks in unloading or loading freight. Members of the union make a base salary of about $81,000 per year, but some can pull in over $200,000 annually with large amounts of overtime.

Late Monday, USMX said its latest offer would boost dockworkers' wages by nearly 50%, triple employer contributions to employee retirement plans and enhance health care coverage, while also preserving existing safeguards against automation.

The union said it "shut down all ports from Maine to Texas ... as tens of thousands of ILA rank-and-file members began setting up picket lines at waterfront facilities up and down the Atlantic and Gulf Coasts" after the last USMX offer "fell far short of what ILA rank-and-file members are demanding in wages and protections against automation."

The Port of New York and New Jersey quickly said it was closing numerous facilities Tuesday due to the strike. The Port of Virginia did the same. 

Workers began picketing at the Port of Philadelphia shortly after midnight, walking in a circle at a rail crossing outside the port while chanting "No work without a fair contract," the Associated Press reported, adding that the ILA had message boards on the side of a truck saying, "Automation Hurts Families: ILA Stands For Job Protection."

President Joe Biden, a close ally of organized labor, has so far declined to directly intervene, citing the need to respect collective bargaining rights. But business groups are sure to heighten calls for action if the strike drags on.

The National Association of Manufacturers urged Mr. Biden to invoke his authority under national security laws to order workers back to the ports as bargaining continues.

"The president can protect manufacturers and consumers by exercising his authority, and we hope he will act quickly," Jay Timmons, CEO of the trade association said in a statement.

Biden and Vice President Kamala Harris are "monitoring potential supply chain impacts and assessing ways to address potential impacts," the White House said in a statement on Tuesday. "The President and Vice President were briefed on agency assessments that show impacts on consumers are expected to be limited at this time, including in the important areas of fuel, food and medicine."

The Teamsters union called on the Biden administration to stay out of the labor dispute and let workers "withhold their labor for the wages and benefits they have earned."

The strike comes on the heels of walkouts at U.S. automakers and Boeing, among others.

Potential impact on consumers and the economy

The ports affected by the strike handle roughly half of the country's ship cargo. Experts say the economic impact of a prolonged work stoppage could be steep, potentially raising the cost of consumer goods and creating shortages ahead of the holidays.

A one-week strike could cost the U.S. economy nearly $3.8 billion and increase the cost of consumer goods, according to the Conference Board.

"Shipments diverted to the West Coast and then placed on freight networks to ship east could add at least a week of transit time and additional costs," Wedbush Securities analysts said in a note to investors. "We see potential for ripple effects even for those with limited exposure to shipments originally bound for the East Coast and Gulf Coast as West Coast ports likely lack the capacity to fully absorb disrupted volume."

For consumers and businesses, a longer strike could hamper shipments of products such as bananas, manufacturing components, plywood, and raw materials such as cotton and copper. Fresh meat and other refrigerated foods also could spoil, resulting in shortages and increased prices.

Still, many retailers and other businesses have been preparing for months, stockpiling products that could be disrupted by the port shutdowns.

"Goods for the holiday season typically ship between August and October," Wedbush said. "With that said, we believe that most holiday-heavy retailers adjusted their schedules in anticipation of a labor disruption — limiting some near-term downside risk in our view."

Soon after the walkout began, New York Gov. Kathy Hochul issued a statement saying her administration "has been working around the clock to ensure that our grocery stores and medical facilities have the essential products they need. It's critical for USMX and the ILA to reach a fair agreement soon that respects workers and ensures a flow of commerce through our ports. In the meantime, we will continue our efforts to minimize disruption for New Yorkers."

Hochul said in a news conference Monday that New York doesn't expect shortages of essential items anytime soon, and she advised consumers against stockpiling goods.