Conor here: Let’s hope the new contract (whenever it’s reached) expires on April 30, 2028 — the day before a possible general strike.
That’s because, according to the WSWS, dockworkers on the East and Gulf coasts are playing a weak hand due to the lack of unionization of West Coast dockworkers and railroad workers:
Class I railroads are helping in the effort, with North American operator CSX announcing that in the event of a strike, “they will operate each port to pick up cars … as long as [it] can safely reach the terminal” and can accept imports “until the port is closed.” Railroads will also play an important role in transporting goods diverted from the West Coast back to the eastern United States.
In the past few months, West Coast ports have also seen an increase in volume as companies redirect shipments to the other side of the country. In July, the West Coast’s share of US imports fell to 50 percent, compared to a low of 44 percent in the same period last year.
These numbers are likely to rise significantly. The ports of Los Angeles and Long Beach are currently at 80 percent and 70 percent capacity respectively as of September, meaning they have additional cargo space and may be ready to exceed capacity.
By Anna Nagurney, professor and Eugene M. Isenberg Chair of Integrated Studies at UMass Amherst. Originally published on The Conversation.
Whether you’re buying a can of sardines or a screwdriver, getting products to consumers requires efficient supply chains.
Labor availability is important for each link of the supply chain. That includes the staff who make sure your canned fish and portable equipment travel smoothly from their point of origin to their final destination, whether it’s a supermarket, a hardware store or your front door.
Astonishingly, 90 percent of all products sold internationally are carried by ships at some point. At the height of the COVID-19 pandemic, it was hard not to see supply chain disruptions. At US ports, there were many periods of congestion. The demand for goods that were more or less popular than what they were usually called for changed. Shortages of truckers and other freight service providers have wreaked havoc on land and sea transportation networks.
Shoppers get upset when they see all the shelves empty. They endured price hikes for suddenly scarce items, such as hand sanitizer, computer equipment and bleach.
I am a supply chain management scholar in a research group studying ways to make supply chains resilient to disruptions. Based on that research, and what I learned while writing a book about labor and supply chains, I’m concerned about the potential chaos when goods arrive on ships.
Payroll and Technology Concerns
The International Longshoremen’s Association’s six-year contract with East Coast and Gulf Coast ports will expire on September 30, 2024, at midnight unless the two sides reach an agreement before that deadline. Without success, 45,000 dock workers intend to participate in a strike that will paralyze ports from Maine to Texas.
If they do go out of business, it would be the first shutdown of East Coast ports since 1977.
Workers and management disagree on how much wages should be raised, and the union also wants to see restrictions on the use of flexible cranes, gates and trucks at the ports in a new contract. The union wants a 77% wage increase over the next six years and is worried that jobs may be lost due to changing machines.
West Coast dock workers, who are not on strike, are paid regular wages that are significantly higher than their East Coast and Gulf Coast counterparts who are preparing to strike. West Coast workers earn at least US$116,000 a year, for a 40-hour work week, compared to about $81,000 for workers on the East Coast and Gulf Coast take home, not counting overtime pay.
Management is represented in the talks by the US Maritime Association, which includes major shippers, terminal operators and port authorities.
White House officials are calling on dock workers and longshoremen to resolve their differences as the strike continues.@MrSethHarrisformer senior labor policy adviser to President Biden, joins Yahoo Finance to discuss: pic.twitter.com/rund2TWQI3
– Yahoo Finance (@YahooFinance) September 27, 2024
What to Expect When There’s a Strike
As many as 36 ports would have to shut down in the event of a strike, blocking nearly half of the cargo coming in and out of the US on ships.
If the strike lasts for just a day, it will not be visible to the average consumer. However, businesses of all types can undoubtedly feel the pressure. JP Morgan estimates that a strike could cost the US economy $5 billion every day.
Even if there is only a one-day strike, it can take about five days to repair the supply chain.
If the strike lasts a week, the results will be immediately visible to many consumers.
Some shipping companies have begun rerouting their cargo to the West Coast. Even if there is no strike at all, costs will rise and warehouses may run out of space.
The impact on everything from bananas and cherries to chocolate, meat, fish and cheese could be devastating, and shipping disruptions could disrupt trade in some prescription drugs if the strike lasts at least a week.
If the strike lasts a month or more, the goods needed by firms may become scarce. Many consumer products would not be delivered. Workers would be laid off. US exports, including agriculture, may be held up rather than shipped to their destinations. Inflation may rise again. And there will be a new era of economic anxiety and uncertainty – and huge financial losses.
All the while, West Coast ports will experience unusually high demand for their services, wreaking havoc on shipping there as well.
Yes, We Couldn’t Have Bananas
My research group’s recent work on supply chain disruptions and the impacts of various transportation disruptions, including delays, estimates the impact on fresh product quality. We did research on bananas.
This is not a niche problem.
Bananas are the most consumed fresh fruit in the US
Most of the bananas sold in the US are grown in Ecuador, Guatemala and Costa Rica. About 75% of them land on the Eastern and Gulf coasts.
Although bananas are easy to ship, they need the right temperature and humidity. Even under the best of circumstances, their quality deteriorates. A long delay will mean that shippers will try to put brown bananas on buyers who might reject them.
Alternatively, banana farmers may choose to find other markets. It is reasonable to expect to find fewer bananas and higher prices – possibly of lower quality. Flying bananas to the US will be too expensive to support.
Fresh meat and other refrigerated foods can spoil before they complete their journey, and fresh berries, along with other fruits and vegetables, can die before they reach their destination.
If there is a port strike, tons of fresh produce, including bananas, that will arrive after Oct. 1 will end up doomed. That’s unfortunate, given the growing rate of food insecurity in the US
1947 Taft-Hartley Act
More than 170 trade groups urged the Biden administration to intervene at the last minute to avoid a strike.
The government can use the Taft-Hartley Act of 1947, which allows the president to ask a court to order an 80-day cooling-off period when public health or safety is at risk.
However, President Joe Biden is reportedly not planning to ask for it – as he urges both sides to resolve their differences.
So if you’re planning to bake banana bread or have been thinking you might start holiday shopping early, I’d advise you to make that shopping trip as soon as possible – just in case.