U.S. port strike could cause a ripple effect across the country
On Oct. 1, after unsuccessful negotiations over a new labor contract concerning wages and automation, U.S. East and Gulf Coast dockworkers went on strike.
The International Longshoremen’s Association (ILA) union and the U.S. Maritime Alliance (USMX), which represents employers in the longshore industry, were unable to reach a new contract agreement.
This is the first major strike since 1977, leading to the suspension of about one-half of the nation’s ocean shipping.
According to an Associated Press report, a staggering 47,000 members of the ILA in 36 ports from Maine to Texas took to picketing shortly after midnight.
After the strike began, ILA International President Harold Daggett spoke at the Port Newark-Elizabeth Marine Terminal in the New York Metropolitan area.
“We are prepared to fight as long as necessary and stay out on strike for whatever period of time it takes to get the wages and protections against automation our ILA members deserve,” he says. “They must now meet our demands for this strike to end.”
Daggett blames the USMX for the strike, claiming they decided to hold firm to foreign-owned ocean carriers earning billion-dollar profits at U.S. ports, but not compensate the American ILA longshore workers who perform the labor which brings them their wealth.
However, the union states it would continue handling military cargo and working passenger cruise ships.
Possible economic effects
According to industry data, the affected ports handle over 68 percent of all containerized exports in the U.S. and approximately 56 percent of containerized imports.
Economic experts warn even a brief strike would significantly disrupt regional trade flows and lead to higher shipping costs, ultimately impacting consumers.
Before the strike on Sept. 28, Business Roundtable Chief Executive Officer Joshua Bolton states, “A port strike could cost the U.S. economy billions daily, affecting American businesses, workers and consumers nationwide.”
A strike would reduce U.S. economic activity by between $4.5 billion and $7.5 billion for every week it continues, Oxford Economics analysts state.
Oxford Economics, an investment research firm, estimates it would take up to a month to clear the backlog of shipments piled up while ports remain shut.
Although West Coast terminals could absorb some cargo diverted from Eastern ports, they couldn’t handle it all, nor could the U.S. rail system, experts say.
Ag industry could feel impact of strike
According to recent American Farm Bureau Federation (AFBF) reports, the current port strike is risking $1.4 billion in weekly agriculture trade.
“In 2023, over 143 million metric tons of agricultural products – worth over $122 billion – were transported through ocean ports,” AFBF notes. “This represented just over 70 percent of U.S. agricultural export value and 75 percent of volume.”
AFBF further notes, on the import side, U.S. ports received over 39.4 million metric tons of agricultural products worth more than $110 billion, accounting for 56 percent of imports by value.
“Cutting off this vital outlet for producers is particularly biting when soybean producers are expected to harvest a record crop,” states AFBF Economist Daniel Munch. “Soybean producers near Norfolk, Va. − which handles over 60 percent of East Coast containerized soybean exports − could feel the greatest impact.”
“Nearly 80 percent of waterborne poultry exports would be jeopardized, lowering prices for poultry producers as they lose vital market access,” reports AFBF. “Nearly one-half of East Coast containerized poultry exports pass through the Port of Savannah.”
The AFBF also reports ports impacted by the strike process 3.8 million metric tons of bananas annually, which accounts for 75 percent of the nation’s supply.
A Sept. 20 Farm Journal article states, “East and Gulf Coast ports accounted for 44 percent of U.S. waterborne pork exports and 29 percent of waterborne beef exports in the first half of this year.”
“New York, New Jersey, Wilmington and Charleston were the largest East and Gulf Coast ports for pork exports and Houston was largest for beef,” the article continues.
Addressing concerns
Nearly 200 agriculture groups warned President Joe Biden of the potential fallout of such a strike in a letter sent to the White House asking for help to mitigate the economic toll of the strike and other transportation challenges.
The letter, headed by the National Grain and Feed Association, highlighted “the impact on the supply chain will quickly reverberate throughout the agricultural economy, shutting down operations and potentially lowering farmgate prices” if the strike takes effect.
About 40 percent of U.S. containerized agricultural exports move through the East and Gulf Coast ports, the groups wrote.
USDA released a statement in response to the labor dispute, saying it is taking action to monitor and address potential consumer impacts.
“Our analysis shows we should not expect significant changes to food prices or availability in the near term,” the statement indicates. “Thanks to the typically smooth movement through the ports of goods and our strong domestic agricultural production, we do not expect shortages anytime in the near future for most items.”
Additionally, the USDA assures non-containerized bulk export shipments, including grains, would be unaffected by the strike.
USDA adds, “For meat and poultry items exported through East and Gulf Coast ports, available storage space and redirection of products to alternative domestic and international markets can alleviate some of the pressure on farmers and food processors.”
“We are keeping an eye on downstream impacts in the West, and we will continue to monitor and work with the industry to respond to potential impacts. Our administration supports collective bargaining as the best way for workers and employers to come to a fair agreement, and we encourage all parties to come to the bargaining table and negotiate in good faith – fairly and quickly,” USDA says.
Melissa Anderson is the editor of the Wyoming Livestock Roundup. Send comments on this article to roundup@wylr.net.
