In a significant labor action, dockworkers across every major port on the U.S. East and Gulf coasts have initiated a strike, the first of its kind in nearly half a century. This unprecedented walkout, which began at 12:01 AM Eastern Standard Time on Tuesday, could have far-reaching effects on the U.S. economy and create political turmoil just weeks ahead of the presidential election.
The 36 impacted ports, which handle approximately half of all U.S. trade volumes, are now facing immediate shutdowns of container operations and auto shipments, although energy supplies and bulk cargo will remain unaffected. Certain exceptions are being made for military goods and cruise ships. According to estimates from JPMorgan Chase & Co., the economic fallout from this work stoppage could range from $3.8 billion to $4.5 billion per day, depending on its duration. Grace Zwemmer from Oxford Economics noted that a week-long strike could lead to shipping congestion lasting about a month.
The International Longshoremen’s Association (ILA) is demanding higher wages and a rollback of automation-related language in a six-year contract that expired at midnight. Union leader Harold Daggett has warned for months that a strike would commence on Oct. 1 if an agreement was not reached. “We are prepared to fight as long as necessary,” Daggett stated, adding that the last offer from employers “fell far short” of what ILA members expect.
The U.S. Maritime Alliance, representing ocean carriers and terminal operators, has accused the ILA of halting negotiations since talks broke off in June. Although some progress was reportedly made over the weekend following White House communication with both parties, President Joe Biden, who has a pro-union stance, declined to invoke national security laws to order dockworkers back to work.
Trade and retail industry groups are pressing the White House to intervene to minimize damage from the strike. Suzanne Clark, CEO of the U.S. Chamber of Commerce, expressed her concerns in a letter to Biden, warning that allowing a contract dispute to disrupt the economy would be “unconscionable.” Meanwhile, the National Association of Manufacturers has warned that the strike could jeopardize $2.1 billion in trade daily, potentially reducing GDP by as much as $5 billion each day.
In contrast, the Teamsters union has urged the Biden administration to remain uninvolved, while ILA’s Daggett cautioned that any forced return to work would result in dockworkers handling fewer containers, further delaying operations.
As operations wound down ahead of the strike, many importers proactively redirected shipments through West Coast ports or brought goods in early to mitigate potential disruptions. New York Governor Kathy Hochul confirmed the start of the strike, stating that the state had been preparing to ensure essential goods were available for grocery stores and medical facilities.
Transportation Secretary Pete Buttigieg underscored the urgency of reaching a resolution, emphasizing that “there’s really no substitute for the ports being up and running.”