At a time when America can least afford it, the International Longshoremen’s Association has gone on strike. Coming on the heels of high inflation, a major storm, and a potential Middle East War, the strike could have massive consequences on Main Street America.
The International Longshoremen’s Association (ILA) strike, which began earlier this week, has sent ripples across the U.S. economy. The walkout includes about 45,000 workers. They are across 14 major ports from Maine to Texas. This includes key Florida locations like Port Miami and Port Everglades. Negotiations on a new six-year contract have stalled. The strike aims to secure wage increases and safeguard jobs from automation. There are concerns about potential shortages, price hikes, and broader economic disruptions.
Why Are Dockworkers on Strike?
The crux of the strike centers on wages and automation. The ILA represents around 85,000 workers in North America. This includes the Atlantic and Gulf Coasts, Puerto Rico, and the Bahamas. They are pushing for significant wage hikes. They also seek job protections against the increasing use of automation at ports.
The union initially demanded a 77% pay raise over the six-year contract, citing inflation and minimal raises in previous agreements. Currently, ILA members earn a base salary of $81,000, but some make over $200,000 with overtime. On the other side, the United States Maritime Alliance (USMX), representing port operators and shipping companies, countered with a 50% wage increase. They also promised to triple retirement contributions and enhance health care. While the alliance agreed to maintain some limits on automation, the union is pushing for a complete ban.
Despite the USMX’s robust offer, ILA President Harold Daggett accused the alliance of not offering fair compensation. He stated, “They would love to see automation up and down the whole East and Gulf Coast. If it were up to them, we would have no jobs.”
USMX estimated that the strike would impact 25,000 workers. It would shut down 14 major ports. These ports include Baltimore, Boston, Charleston (South Carolina), Jacksonville (Florida), and Miami. Miami is grouped with Port Everglades in Fort Lauderdale. Other affected ports include Houston, Mobile in Alabama, and New Orleans. New York/New Jersey, Norfolk in Virginia, Philadelphia, Savannah, Tampa, and Wilmington .
Are you Concerned About The Every Day American?
During a CNN interview, Daggett was asked whether he was concerned about the strike hurting the everyday American. He responded: “Listen, now you start to realize who the Longshoremen are. People never gave a (expletive) about us until now….Cars won’t come in, clothing won’t come in, food won’t come in. Now it’s time for them to put pressure on Washington to take care of us.”
The Impact of The ILA Strike on Florida’s Economy
Florida’s ports are important to the state’s economy. PortMiami and Port Everglades are particularly vital. These ports handle vast quantities of fresh produce, seafood, and spirits. With the strike in effect, industries dependent on these imports could see supply shortages. Prices may also increase. This is especially true if the work stoppage extends beyond a few weeks.
The ports involved in the strike manage about half of the nation’s shipping cargo, and experts warn that an extended work stoppage could have significant economic consequences. It may lead to higher prices for consumer goods and potential shortages as the holiday season approaches. According to the Conference Board, a strike lasting just one week could cost the U.S. economy approximately $3.8 billion and drive up consumer prices.
A prolonged strike could disrupt the delivery of various products for consumers and businesses. These products include items like bananas, manufacturing parts, and plywood. Raw materials such as cotton and copper could also be affected. Additionally, fresh meat and other refrigerated goods could spoil, leading to shortages and higher prices. American ports involved in the strike handle 75% of the nation’s banana supply, or about 3.8 million metric tons annually. Similarly, seafood, which accounts for $17 billion in imports, is already facing logistical challenges.
Danny Munch of the American Farm Bureau Federation highlighted a potential issue. The supply of perishables like bananas and seafood could dwindle quickly. This reduction would affect grocery shelves and restaurants. If the strike drags on, prices could surge due to shortages, making certain products scarce or more expensive for consumers.
Florida’s fuel supply is another concern. The state relies on imports for a significant portion of its gasoline and diesel needs. Although refineries remain operational, a prolonged port shutdown could disrupt fuel deliveries, potentially leading to higher prices at the pump.
National Economic Impacts
The effects of the strike extend well beyond Florida, with experts warning that the U.S. economy could lose $3.8 to $4.5 billion daily if the shutdown persists. The ports affected by the strike handle about half of the nation’s ocean imports. These include critical goods such as automobiles, electronics, clothing, pharmaceuticals, and manufacturing components. Disruptions in these supply chains could raise costs for retailers, who might pass these increases on to consumers.
Supply chain experts estimate that for every day the ports remain closed, it could take three to five days to catch up. This delay occurs once operations resume. A strike lasting just one week could require six weeks for recovery. In contrast, a two-week strike might extend the economic fallout for several months.
Despite these challenges, some businesses have preemptively prepared for the potential strike by stockpiling goods. Many retailers, in particular, have shifted shipments of holiday merchandise earlier in the year. This includes toys and electronics. They do this to avoid delays. However, if the strike stretches on, shortages could emerge as early as November, coinciding with the holiday shopping season.
Jonathan Gold of the National Retail Federation warned, “A work stoppage beyond a few weeks could spell trouble. It poses a challenge for retailers who depend on just-in-time deliveries. Some may have to pay a premium to redirect shipments, further driving up costs.”
Cruises Are Not Affected
One critical sector that remains unaffected by the strike is the cruise industry. Despite concerns about widespread port closures, the ILA has assured passengers that cruise ships will not be impacted. Florida’s cruise ports, including PortMiami, Port Everglades, and Port Canaveral, continue to operate normally. No disruptions are expected to vacation plans.
ILA President Harold Daggett emphasized the union’s commitment to keeping cruise vessels operating. He said, “We understand that many families plan and pay for cruise vacations more than a year out. We don’t want them to be disappointed or inconvenienced in any way.”
Potential Price Increases and Shortages
Though cruise operations will remain uninterrupted, the ILA strike has the potential to disrupt the supply of goods across the country. This is especially true if it drags on. Analysts warn that East and Gulf Coast ports staying closed for an extended period may lead to a shortage of consumer goods. It could also affect fuel and food supplies. This could spark price hikes.
Items most vulnerable to shortages include fresh produce, seafood, clothing, and electronics. Fresh meat and other perishables are also at risk, as port delays could lead to spoilage. In response, retailers may be forced to raise prices, and consumers might notice reduced availability of certain goods.
Gasoline prices are another concern. Although no immediate fuel shortages are expected, a long-term strike could eventually disrupt fuel deliveries, leading to price increases. Fuel costs are especially sensitive to supply chain disruptions, and even a slight delay in shipments could result in price hikes at the pump.
Negotiation Efforts
As the strike enters its second week, there are no immediate signs of a resolution. The USMX has called on the Biden administration to intervene, citing the strike’s economic toll. The White House could ease tensions by invoking the Taft-Hartley Act. This act is designed to provide a “cooling off period”. It also offers extended time for negotiations before an actual ILA strike takes place. With the Presidential election just around the corner, the White House has so far refrained from direct involvement. It states that it is monitoring the situation. It also respects the collective bargaining process. The Democratic party has traditionally relied on labor union support.
The ILA leadership, seemingly tone-deaf, has made a clear statement. They are prepared for a long fight. This is true no matter the cost to their fellow citizens. “We are prepared to stay out on strike for however long it takes,” Daggett said, reiterating the union’s stance on protecting jobs from automation and securing better wages.
Both sides are standing firm with no clear end in sight. The nation may have to brace for a prolonged disruption in port operations. Florida, in particular, could face challenges, and this potentially could cost every American at the cash register.
