A large-scale strike by dockworkers on the US East Coast and Gulf Coast has begun, causing significant disruptions in logistics. If the strike persists, it could become one of the most destructive strikes in US history, potentially leading to shortages in consumer and industrial goods and exacerbating inflation.
The strike is organized by the International Longshoremen's Association (ILA, Financial), representing nearly 50,000 dockworkers. The affected ports handle over half of the US container cargo capacity, and a one-week strike could result in an economic loss of $7.5 billion. The most impacted port is the Port of New York and New Jersey, the third-largest port by cargo volume in the United States.
The strike began on October 1, affecting nearly all goods ports from Maine to Texas. The halted goods include bananas, European beer, wine and spirits, furniture, clothing, household items, various industrial parts, and European cars.
The strike originated from a significant gap between the contract proposals of the ILA and the United States Maritime Alliance (USMX). USMX represents major shipping companies, terminal operators, and port authorities. USMX's proposal includes a nearly 50% wage increase over a proposed six-year contract, addressing inflation concerns. They have criticized the union for lacking negotiating sincerity, with no face-to-face talks since June.
The dockworkers' union seeks a $5 per hour wage increase annually over six years, raising the top wage from $39 to $69 per hour, equivalent to nearly an 80% wage hike.
Since the COVID-19 pandemic began, global shipping demand has surged due to supply chain disruptions, leading to a spike in shipping rates. Data analysis shows that from 2020 to 2023, the shipping industry's profit exceeded $400 billion, surpassing the total industry profit since containerization began in 1957.
ILA leaders argue that the massive profits earned during the pandemic should be shared with the workers, criticizing the industry's preference for fully automated terminals on the East Coast to increase profits at the expense of jobs.
There is also a dispute over the use of automation in ports, with the union contending that it could result in job losses for some members. The US Department of Transportation stated on October 1 that it has been in contact with shippers, maritime carriers, ports, railways, and other supply chain partners for months to prepare for a possible strike and mitigate bottlenecks in the supply chain.
