Economy A looming port strike could fuel inflation and cause layoffs the ILA is officially on strike

[White Whale]

A looming port strike could fuel inflation and cause layoffs, experts say

Tens of thousands of dockworkers are set to strike as soon as Oct. 1.

abcnews.go.com

A looming port strike could fuel inflation and cause layoffs, experts say
Tens of thousands of dockworkers are set to strike as soon as Oct. 1.

Tens of thousands of dockworkers are set to strike as soon as Oct. 1, potentially snarling dozens of ports along the East and Gulf coasts with major implications for the U.S. economy.

A shutdown of the ports would cost the economy up to $4.5 billion each day, according to a report from JPMorgan senior equity analyst Brian Ossenbeck.

The East and Gulf Coast ports account for more than half of U.S. container imports, facilitating the transport of everything from toys to fresh fruit to nuclear reactors, Ossenbeck found.

A strike lasting only a handful of days would wreak little damage, but a prolonged work stoppage of several weeks or months could drive up prices for some goods and cause layoffs at manufacturers as raw materials dry up, experts said.

“The supply chain will start to get shocked after a couple of weeks,” Adam Kamins, a senior director of economic research at Moody’s Analytics, told ABC News. “If it gets beyond that, we’ll start to see some much more signifiant implications."

The International Longshoreman’s Association, the union which says it represents 50,000 East and Gulf Coast dockworkers under the contract at issue, did not respond to ABC News’ request for comment. The U.S. Maritime Alliance, or USMX, an organization bargaining on behalf of the dockworkers’ employers, declined to respond to a request for comment. The USMX claims that only 25,000 workers will be impacted by the work stoppage.

President Joe Biden retains the power to prevent or halt a strike under the 1947 Taft-Hartley Act. Trade organizations sent a letter to Biden earlier this month urging the White House to intervene.

Port workers strike could snarl the supply chain and bust your holiday budget

If East Coast and Gulf Coast port workers don't reach a labor deal this week, Americans could face high prices and shortages this holiday.

www.usatoday.com

Americans could face high prices and shortages again this holiday season but this time, it would be because of a worker strike instead of a global pandemic.

As of Thursday, the International Longshoremen’s Association (ILA) said labor talks with the United States Maritime Alliance (USMX) remain at a standstill, and about 45,000 of its union workers at 36 East coast and Gulf Coast ports are ready to walk on Oct. 1 for the first time since 1977.

A strike could lead to shortages of certain items and boost prices for voters already frustrated with housing and food inflation, experts said. The ports handle about half of U.S. ocean imports, including food, clothing, auto parts, cars shipped via container and holiday toys, experts said.

“A supply chain disruption would undoubtedly lead to price increases across the board and would impact consumers’ ability to find the toys they are looking for in the weeks and months ahead,” said Greg Ahearn, president and chief executive of The Toy Association.

If they strike on Tuesday prices will increase and shortages will put further strain on people.

Get prepared for high prices and shortages if they go on strike.

 

[Sakuraba'sEar]

This is one of the most damaging unions that we currently have in the united states

 

[Cool Hand Luke]

I think this will have a huge impact on the election.

 

[aitkenmike]

"President Joe Biden retains the power to prevent or halt a strike under the 1947 Taft-Hartley Act. Trade organizations sent a letter to Biden earlier this month urging the White House to intervene."

Free market capatilist tycoons, libertarians, business moguls: Please please Mr Government man, please come and help me. Save me from the right of labour to associate and negotiate contracts.

 

[White Whale]

The head of the ILA says he will cripple you to get their way.

 

[deadshot138]

https://www.cnn.com/2024/09/29/business/goods-port-strike-east-gulf-coasts/index.html

Already saying it'll cause worse inflation and affect the labor market negatively. This an exaggeration or a huge deal? What are the odds of a lengthy strike? Anyone know the demands of the workers?

 

[Legumes]

Already saying it'll cause worse inflation and affect the labor market negatively. This an exaggeration or a huge deal? What are the odds of a lengthy strike? Anyone know the demands of the workers?

Did you not watch your own linked source video? It's about wages.

From another article:

Union workers at ports in the East Coast and Gulf Coast earn a base wage of $39 an hour after six years on the job. That is significantly less than their unionized West Coast peers, who make $54.85 an hour — a rate that will increase to $60.85 in 2027, excluding overtime and benefits.

Assuming a 40-hour workweek, West Coast port workers are making more than $116,000 a year, versus $81,000 for their counterparts in the East. The ILA's initial demands included a 77% wage hike over six-year contract, with the labor group arguing that the increased pay would make up for the surge in U.S. inflation in recent years.

 

[Renard]

The great reset happening is a foregone conclusion. How we get there is a technicality. If a plan A fails, they go plan B, plan C, etc. Although in reality it's more like dozens of plans running in parallel. Looks like endless coincidences but culminates in the desired result. As far as unions go, they're easy to control because all you need to do is control the leadership. It's why a lot of unions have mysteriously incompetent and inscrutable overseeing.

 

[Hellowhosthat]

If they're getting less than other people for doing the same job then it seems they have a legitimate gripe, so just pay them.

 

[Andy Capp]

Strikes hurt. That's why they're effective.

 

[650lb Sumo]

Spoiler: Links

The US could see shortages and higher retail prices if a dockworkers strike drags on

A lengthy shutdown could raise prices on goods around the country and potentially cause shortages and price increases at big and small retailers alike.

apnews.com

Dockworkers at key U.S. ports threatening strike consumers could feel

About 45,000 dockworkers along the U.S. East and Gulf Coasts are threatening to strike on Oct. 1, a move that would shut down ports that handle about half the nation's cargo from ships.

www.cbsnews.com

The International Longshoremen’s Association is demanding significantly higher wages, and a total ban on the automation of cranes, gates and container-moving trucks that are used in the loading or unloading of freight at 36 US ports. Those ports handle roughly half of the nation's cargo from ships.

The contract expires between the International Longshoremen’s Association and the United States Maritime Alliance, which represents the ports, on Tuesday. The two sides haven’t held negotiations since June. A strike by the ILA workers would be the first by the union since 1977.

If a strike were deemed a danger to US economic health, President Joe Biden could, under the Taft-Hartley Act, seek a court order for an 80-day cooling-off period. This would suspend the strike.

Brian Ossenbeck, an analyst at JPMorgan,

said he believes Biden might take this route, even though for the moment the administration says it has no plans to.

“We believe the economic impact of a disruption would be too big to ignore for much more than a week, given the economy and inflation are key issues in the heavily contested election,” he wrote in a note to clients.

Analysts say the union's initial demands included a 77% pay raise over the course of a six-year contract.

A 2022 study by the Economic Roundtable of Los Angeles, that was funded by the West Coast dockworkers union, found automation cost 572 jobs each year in 2020 and 2021, at partially-automated terminals at the ports of Long Beach and Los Angeles.

But another study that same year by a professor at the University of California, Berkeley, that was commissioned by port operators and shippers concluded that between 2015, when Los Angeles-area ports adopted some automation, and 2021, paid hours for port union members grew 11.2%.

At the huge Port of Rotterdam, one of the world's most automated ports, union workers pushed for early-retirement packages and work-time reductions as a means to preserve jobs. And in the end mechanisation didn't cause significant job losses, a researcher from Erasmus University in the Netherlands found. Still, he predicted that automation could cut port jobs by 25% in the future.

US ports trail their counterparts in Asia and Europe in the use of automation. Analysts note that most US ports take longer to unload container ships than do those in Asia and Europe, and suggest that without more automation, they could become even less competitive. Shippers might send more cargo to Mexican or Canadian ports and then on to the US by rail or truck, said Eleftherios Iakovou, associate director of supply chain resilience at Texas A&M University.

Although it would be annoying to be paid significantly less on the East Coast than workers doing 'the same job' on the West Coast, I would check if there are any differences in the work before getting outraged. Maybe they are handling different kinds of cargo from different kinds of ships from different countries. Maybe the geography (shape of the bays for instance) makes a difference to the work etc.

 

[ColemanwastheGOAT]

The contract expires between the International Longshoremen’s Association and the United States Maritime Alliance, which represents the ports, on Tuesday. The two sides haven’t held negotiations since June.

It's sometimes still shocking how fucking childish the powerful are. They are the worst among us.

 

[Dalarna3]

It’s an election year. The government will break the strike.

 

[Islam Imamate]

The International Longshoremen’s Association is demanding significantly higher wages, and a total ban on the automation of cranes, gates and container-moving trucks that are used in the loading or unloading of freight at 36 US ports. Those ports handle roughly half of the nation's cargo from ships.


Analysts say the union's initial demands included a 77% pay raise over the course of a six-year contract.


US ports trail their counterparts in Asia and Europe in the use of automation. Analysts note that most US ports take longer to unload container ships than do those in Asia and Europe, and suggest that without more automation, they could become even less competitive. Shippers might send more cargo to Mexican or Canadian ports and then on to the US by rail or truck, said Eleftherios Iakovou, associate director of supply chain resilience at Texas A&M University.

They want raises and a ban on automation? Or in other words, they want to be paid more to be less productive? These kinds of insane union demands hurt the entire country. Less productive ports means less efficient trade. Its not just dock workers either, unions that build public transit also resist automation which means PT projects take longer and cost more.

It’s an election year. The government will break the strike.

The demands seem dumb so I do hope they break it.

 

[humperdoo]

Not sure if they could get back to their job when AI robots are deployed while they are striking. But ye this is a huge deal.

 

[RoastBeast]

I hear @Osculater is our resident expert on docking

 

[Bwagster]

Union dock workers on the verge of a massive strike at midnight. This will drive prices sky high and limit access for food and necessities. Biden Harris administration refuse to use emergency powers to order a 3 week cooling off period to avoid a strike. Compounding the difficulties to provide help and supplies for the Hurricane Helene victims throughout the Southeast. Whom ever is in charge better tell Biden Harris what to do!

Biden just gave his obligatory speech about state of emergency for the hurricane victims but not a mention of curbing the strike come midnight tonight. I hope they figure this out asap. Most like it will get resolved by midnight. They’re gonna negotiate up until the last minute.

 

[650lb Sumo]

A bit more on the obsolescence of US port infrastructure:

Spoiler: Depart of Transportation, Maritime Administration Press Release from 2021

Spoiler: Link

https://www.maritime.dot.gov/newsroom/press-releases/biden-harris-action-plan-americas-ports-and-waterways

While American ports are a cornerstone of the US economy, outdated infrastructure and the COVID-19 pandemic have strained their capacity and jeopardised global supply chains. ...the ASCE report warns that ports face extensive challenges modernising infrastructure and maintaining essential facilities under threat from sea level rise and other climate challenges. Only four US ports are among the top 50 busiest ports in the world, and no US port is in the top 10. Many US ports also have bridge or depth limitations that restrict their ability to receive the larger, post-Panamax vessels that are the future of ocean shipping. Further, the surge of cargo coming off larger vessels can also strain outdated landside infrastructure. As a result, more container traffic flows through a smaller number of US ports with the offshore and onshore capacity to handle the largest vessels and their cargo. Taken together, America’s underfunded port and waterway infrastructure has real costs for our families, our economy, and our global competitiveness.

Recognising the critical role American ports play in the global economy, President Biden’s Bipartisan Infrastructure Deal includes an unprecedented $17 billion to improve infrastructure at coastal ports, inland ports and waterways, and land ports of entry along the border. These resources will deliver near-term assistance and make long-term investments to strengthen supply chain resiliency. Along the way, these investments will create good paying jobs and help America outcompete China. Together, the Bipartisan Infrastructure Deal is the single largest federal investment in our ports in U.S. history.

Spoiler: White House Statement from February

Spoiler: Link

FACT SHEET: Biden-Harris Administration Announces Initiative to Bolster Cybersecurity of U.S. Ports | The White House

Today, the Biden-Harris Administration will issue an Executive Order to bolster the security of the nation’s ports, alongside a series of additional

www.whitehouse.gov

Today, the Biden-Harris Administration will issue an Executive Order to bolster the security of the nation’s ports, alongside a series of additional actions that will strengthen maritime cybersecurity, fortify our supply chains and strengthen the United States industrial base. The Administration will also announce its intent to bring domestic onshore manufacturing capacity back to America to provide safe, secure cranes to US ports – thanks to an over $20 billion investment in U.S. port infrastructure under President Biden’s Investing in America Agenda.

The Administration continues to deliver for the American people by rebuilding the US’s industrial capacity to produce port cranes with trusted partners. The Administration will invest over $20 billion, including through grants, into US port infrastructure over the next 5 years through the President’s Investing in America Agenda, including the Bipartisan Infrastructure Law and the Inflation Reduction Act. As a result PACECO Corp., a US-based subsidiary of Mitsui E&S Co., Ltd (Japan), is planning to onshore US manufacturing capacity for its crane production. PACECO has a deep history in the container shipping industry, manufacturing the first dedicated ship-to-shore container crane in 1958 as PACECO Inc., and it continued US-based crane manufacturing until the late 1980s. PACECO intends to partner with other trusted manufacturing companies to bring port crane manufacturing capabilities back to the US for the first time in 30 years, pending final site and partner selection.

Spoiler: The State of US Infrastructure, 2023

Spoiler: Link

The State of U.S. Infrastructure

The Joe Biden administration is implementing the largest federal investment in infrastructure in decades. Here’s why infrastructure matters for U.S. economic competitiveness.

www.cfr.org

The US population has almost doubled since the 1960s, when most of the country’s major infrastructure systems were designed. Many are reaching the end of their lifespan and are dangerously overstretched, experts say.

In its 2021 report card the American Society of Civil Engineers (ASCE), an industry group, gave the nation’s infrastructure a 'C-,' up from a 'D+' in 2017 - the highest grade in twenty years. Still, the group estimated that there is an 'infrastructure investment gap' of nearly $2.6 trillion this decade that, if unaddressed, could cost the United States $10 trillion in lost gross domestic product (GDP) by 2039.

The United States generally lags behind its peers in the developed world. Some analysis shows the quality of US infrastructure compared to its peers steadily declining over the past two decades. US infrastructure spending also ranks toward the bottom among G20 countries.

America is the world’s largest importer in terms of dollars, so effective ports that facilitate the movement of goods are crucial for our economy. Unfortunately, America’s ports are not very efficient according to the CPPI. The authors of the index evaluated 370 ports using port hours per ship call as the primary metric. The study breaks down a port call into six steps, shown in the figure below, and 'total port hours' is defined as the time between when a ship arrives at a port to when it departs from the berth after unloading its cargo.

The index’s top two ports are King Abdullah Port in Saudi Arabia and the Port of Salalah in Oman. The highest ranked U.S. port is the Port of Virginia (23), followed by Miami (29). Meanwhile the California ports were severely penalised for their traffic issues: The port at Long Beach is ranked 369, while Los Angeles is last at 370.

Most US ports are tolerable, but even our best perform worse than many foreign ports, and the recent logjams off the coast of Los Angeles exposed our weakest ones. These subpar ports are contributing to the highest inflation rate in 40 years.

Spoiler: US Seaports: At the Crossroads of the Global Economy (1996)

Spoiler: Link

U.S. Seaports: At the Crossroads of the Global Economy

U.S. seaports are showing signs of neglect, a disturbing prospect as the nation competes in an increasingly dynamic global economy. Many aspects of port infrastructure and management are relics from mid-century. And while ports throughout Europe and Asia are becoming more modern and productive...

issues.org

US seaports are showing signs of neglect, a disturbing prospect as the nation competes in an increasingly dynamic global economy. Many aspects of port infrastructure and management are relics from mid-century. And while ports throughout Europe and Asia are becoming more modern and productive, many US ports will soon become obsolete in the absence of significant upgrading and investment.

Many US ports are cramped for space, with narrow navigation channels, shallow harbours and congested truck and rail access routes. For example the harbour at Newark, New Jersey is so shallow outside the dredged channel, and so prone to siltation that very large ships must unload part of their cargo in Nova Scotia or elsewhere, thereby raising shipping costs and putting the port at a competitive disadvantage. Maintenance and expansion of navigation channels often is impeded by delays in the granting of permits, a complex web of environmental regulations, and disagreements about how to dispose of dredged material. As a case in point it took the Port of Oakland 20 years to begin the first phase of a channel-deepening project.

Meanwhile the size of cargo ships has increased considerably. Large oil tankers long ago outstripped the capacity of all ports on the East Coast and along the Gulf of Mexico, and many shipping terminals are finding it increasingly difficult to handle large container ships in competitive time. Port development is slow, frustrated by high costs and budget cutbacks at all levels of government, and the waterways-management infrastructure generally lags available technology.

Contrast these conditions with those in Rotterdam, the Netherlands, one of the most sophisticated seaports in the world. The channel is 50 feet deep, large enough for megacarriers that have yet to be built. An elaborate waterways-management system tracks vessels and provides a running commentary on traffic, reducing disruptions significantly. Cargo handling is highly automated - state-of-the-art pierside cranes load or unload 30 containers per hour, robot stacking cranes dot the container yard, and truckers move containers in and out of the terminal quickly. Although the average US port’s average of 28.5 containers per hour may seem roughly equivalent, fractional differences in productivity can have major economic consequences over time. Or consider the new container facility planned for Japan’s Port of Yokohama. To be built on 535 acres reclaimed from Tokyo Bay, the port will include vessel berths that are more than 49 feet deep, a modern container terminal allotted 138 acres, and ample storage and distribution areas and access roads.

Although specific projections of economic losses have not been made, failure to modernise US ports is likely to result in substantial losses of American jobs, and in increases in the price of goods transported. Some industry officials predict dire consequences, such as the development of huge ports in neighbouring nations that draw shipping away from the United States, and impose significant time and cost penalties on U.S. imports and exports.

 

[jx820]

It’s an election year. The government will break the strike.

This is what I'm expecting.

I work in supply chain so this is all pretty close to home for me.

Something like 20% of the US retail spending happens between Black Friday and Christmas. A lot of those goods, are already on the water. Rerouting the rest to Canada, Mexico, and the West Coast is possible but it will create logistics bottlenecks, added costs, and a supply side shortage for trucks, and railcars.

If they wouldn't let the rail workers strike because of the potential fallout, I can't imagine they'll let this go.

The one possible thing I see preventing government intervention is if the Republicans decide that chaos and economic hardship benefit them in the election. If that happens the Whitehouse would side with the unions publicly and try to stake out the pro worker position. If they put the election talking points over the good of the country (which they've already done once this election cycle) then it's between the ports and the union.

Besides consumer retail, I think imported food products would be an issue.

The industrial sector will likely be less effected because we've done a lot of re-patriating our supply chain to domestic suppliers and a lot of manufacturers are prioritizing supply surity over lean or just in time production since the supply chain crisis.

IMO basic protections from AI replacement and a salary that matches their west coast counterparts is a completely reasonable request and should be rubber stamped.

 

[Islam Imamate]

IMO basic protections from AI replacement and a salary that matches their west coast counterparts is a completely reasonable request and should be rubber stamped.

How is that completely reasonable? They want less automation and thus less efficiency and productivity but also higher wages? American docks are already less efficient than more automated docks in Europe and Asia but if you try to increase productivity through automation the unions revolt?

Its absurd and they should have no right to hold the American economy hostage just so they can extract more for less.