Strike Shutters Half of U.S. Ports: What It Means for You

Source: U.S. Chamber of Commerce

As of midnight on Oct. 1, tens of thousands of International Longshoremen’s Association (ILA) members went on strike at ports along the East and Gulf Coasts.

Ahead of the strike, on Sept. 30, the U.S. Chamber called on President Biden to intervene in the contract negotiations between the ILA union and the U.S. Maritime Alliance (USMX) by invoking Taft-Hartley to avoid a work stopagge that would shutter those ports.

Poll: A Majority of American Voters Support Government Intervention to Stop a Strike

According to a new national poll from the U.S. Chamber, a majority of American voters (57%) support the Biden Administration taking action to keep the ports open and operating while negotiations continue, while roughly 20% of those surveyed said they were opposed to federal intervention.

The national poll surveyed 1,467American voters in September 2024. Margin of error is ~2.8%.

The Impacts of a Strike

America’s seaports are critical gateways for goods entering and leaving the United States. A strike by the ILA would have a devastating economic impact, crippling major supply chains and cutting off the flow numerous goods American consumers and businesses rely on every day.

These ports collectively handle more than 68% of all containerized exports and 56% of imports for the nation, with a daily trade value exceeding $2.1 billion. The National Retail Federation recently noted that economists believe a similar disruption in 2002 cost the economy $1 billion per day and it took six months for the economy to recover.

Port Congestion and Supply Chain Disruptions

Congestion caused by a port strike would force shippers to use longer ocean routes and longer inland routes to move commodities to U.S. and international markets. Ports predict that for every day of a strike, it will take approximately 5 to 7 days to clear. A one-week strike in October could therefore cause slowdowns well into November, creating further headaches for the holiday shopping season.

The impact of a strike will be felt well beyond the coastal areas. A significant portion of cargo handled at East and Gulf Coast ports is either destined for or originates from inland states. For example, manufacturers in Ohio, Michigan, and Illinois depend on these ports to import essential components and export finished products. Similarly, the agricultural sector in the Midwest relies heavily on the efficient functioning of these ports to access global markets. Therefore, any disruptions could have a cascading effect on supply chains nationwide, affecting businesses and consumers across all states.

By the Numbers

A high-level analysis of economic impacts by MITRE Corporation found that an ILA strike lasting 30 days would have an economic impact of:

• $640 million per day at the New York/New Jersey ports.
• $600 million per day at Virginia ports.
• $51 million per day in exports at Houston ports.
• $41.5 million per day in imports at Houston ports.

Small Business Fallout

Small businesses would face the brunt of the economic fallout from a strike as they are already operating within smaller margins, a tighter labor market, and higher costs from inflation. Delays in shipments of necessary products or materials can quickly grind their operations to a halt – impacting workers and communities that rely on these businesses.

Most Important Issues Under Negotiation

The two most important issues in this negotiation are the same as previous negotiations: worker pay and automation. However, the ILA is making outrageous demands on both.

Media reports indicate the ILA is demanding a 77% pay increase over six years. This eclipses the 32% wage increase that the union representing West Coast port workers won last year for a contract of similar length. Port operators want to provide workers with a fair pay increase, but the ILA has reportedly rejected an offer to increase wages by 40%.

The ILA is also demanding that the ports freeze implementation of technology that improves productivity, including measures that speed up the process of loading and unloading ships. Ports argue that these improvements are critical to America’s long-term competitiveness. A high level of productivity means containers and goods move quickly through ports, helping keep transportation costs low and getting products to store shelves quickly. These updates are badly need, because today U.S. ports rank as some of the least productive in the world. According to The World Bank Group and IHS Markit, no U.S. port ranked in the top 50 for productivity in the world.

With many U.S. ports already at capacity and trade volumes expected to climb, the lack of automation technology and continued inefficiencies at these ports will come at a cost to American global competitiveness. These improvements, however, can only be made through an agreement with the port workers.

What Happens Next?
With myriad challenges – including the ongoing Houthi attacks on vessels in the Red Sea – already plaguing maritime supply chains, a strike at the East and Gulf Coast ports in the U.S. would deal another significant blow to workers, businesses, and communities across the nation.

This summer, the U.S. Chamber joined dozens of organizations in calling on the Administration to take action to ensure an agreement is reached. The U.S. Chamber continues to encourage the Administration, Congress, and all relevant parties to pursue negotiations until a deal is reached and to avoid any possible disruptions in operations.

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Author - Neil Bradley is executive vice president, chief policy officer, and head of strategic advocacy at the U.S. Chamber of Commerce. He has spent two decades working directly with congressional committee chairpersons and other high-ranking policymakers to achieve solutions.