Out of the several potential strikes currently on the table in the U.S., the walkout of most severe concern would be a possible October 1st coastwide strike by the International Longshoremen’s Association (ILA), representing 85,000 members with a new six-year contract in the mix.
ILA Union President Harold Daggett has characterized a strike as more likely than not, and he previously canceled June negotiations with United States Maritime Alliance (USMX) representing employers. Daggett also insists that the union will not extend the current contract under any circumstances. We will talk about Biden’s possible role in a moment, but the possibility of a strike cannot be ruled out, and its effects would be severe:
Sticking points: The union wants higher raises than the 32% negotiated for West Coast dockworkers in 2023. The ILA is also focusing on protections against the use of port automation. The ILA feels so strongly about that issue and its claimed relation to job projections that a dispute over the Port of Mobile automation is why June negotiations faltered.
Potential impacts of a dockworker strike: As seen with the 24-hour West Coast walkout, even a brief port stoppage has long-lasting effects on supply chains nationwide and across the globe. And remember how the United Auto Workers (UAW) and WGA/SAG-AFTRA strikes caused pain to several industries, including retail, hospitality, food service, construction, and aviation?
In the case of this dockworker strike, the effects would be worse and touch nearly every industry while snarling 6 out of 10 most trafficked U.S. ports (including New York, Houston, and New Orleans). This would prompt a domino effect, causing shortages for most consumer goods and billions of dollars in daily damage. A week-long strike would lead to detrimental ripple effects for at least six weeks.
What to watch: ILA delegates will meet for marathon sessions in September to hammer out final contract demands. The union will also brief locals on the next steps to prepare for a strike if talks with the USMX fully collapse and no agreement is met by Sept. 30.
Could the government intervene? Daggett has requested that the Biden administration not interfere. Yet it’s difficult to imagine that Biden would not, as when he halted the 2022 railway strike, take action to prevent crippling many industries at the expense of appeasing one union, especially just before a national election.
Then again, Biden did not preemptively halt a brief 2023 walkout by 20,000 West Coast dockworkers represented by the Longshore and Warehouse Union. The 24-hour work stoppage caused days of bottlenecks there, and Biden sent Julie Su to help close the deal. With 2024 being an election year and the economy in a more precarious state, Biden might not want to wait that long to act, but it’s best not to rely on what a politician might do and prepare as though the strike will move forward.
Prepare now: With six weeks left on the clock, companies should act now to develop contingency plans for shipping if a strike does happen. The effects would potentially devastate not only retailers (ahead of the holiday season) and manufacturers but would touch most industries. It is not too soon to reroute shipments and stockpile inventory.
Policymakers have been stunningly quiet on the issue thus far, so it’s also prudent to contact legislators and put concerns on their radar. Even with these precautions, however, be warned that a strike will likely cause increased load on all ports due to diverted shipments, so any necessary preparations should start immediately.