Dockworkers at US ports go on strike amid standoff risking new shortages

Dockworkers at ports from Maine to Texas in the US have set up picket lines in a strike over wages and automation that could reignite inflation and cause shortages of goods if it goes on for more than a few weeks.

The contract between the ports and about 45,000 members of the International Longshoremen’s Association (ILA) expired at midnight, and although progress was reported in talks on Monday, the workers went on strike.

The strike is affecting 36 ports and is the first by the union since 1977.

Workers began picketing at the Port of Philadelphia shortly after midnight, walking in a circle at a railway crossing outside the port and chanting “No work without a fair contract”.

The union had message boards on the side of a truck reading: “Automation Hurts Families: ILA Stands For Job Protection.”

Local ILA president Boise Butler said workers wanted a fair contract that did not allow automation of their jobs.

Shipping companies made billions during the pandemic by charging high prices, he said.

“Now we want them to pay back. They’re going to pay back,” Mr Butler said.

He said the union would strike for as long as it needed to get a fair deal, and that it had leverage over the companies.

“This is not something that you start and you stop,” he said.

“We’re not weak,” he added, pointing to the union’s importance to the nation’s economy

At Port Houston, at least 50 workers started picketing around midnight local time carrying signs saying “No Work Without A Fair Contract”.

The US Maritime Alliance, which represents the ports, said on Monday evening that both sides had moved off of their previous wage offers.

But no deal was reached.

The union’s opening offer in the talks was for a 77% pay raise over the six-year life of the contract, with president Harold Daggett saying it was necessary to make up for inflation and years of small raises.

ILA members make a base salary of about 81,000 US dollars per year (£61,000), but some can make more than 200,000 dollars (£150,000) annually with large amounts of overtime.

But Monday evening, the alliance said it had increased its offer to 50% raises over six years, and it pledged to keep limits on automation in place from the old contract.

The union wants a complete ban on automation.

“We are hopeful that this could allow us to fully resume collective bargaining around the other outstanding issues in an effort to reach an agreement,” the alliance statement said.

In a statement early on Tuesday, the union said it had rejected the alliance’s latest proposal because it “fell far short of what ILA rank-and-file members are demanding in wages and protections against automation”.

The two sides had not held formal negotiations since June.

Supply chain experts said consumers would not see an immediate impact from the strike because most retailers stocked up on goods, moving ahead shipments of holiday gift items.

But if it went on for more than a few weeks, a work stoppage would significantly snarl up the nation’s supply chain, potentially leading to higher prices and delays in goods reaching households and businesses.

If drawn out, the strike would force businesses to pay shippers for delays and cause some goods to arrive late for peak holiday shopping season — potentially impacting delivery of anything from toys or artificial Christmas trees to cars, coffee and fruit.

The strike would be likely to have an almost immediate impact on supplies of perishable imports such as bananas, for example.

It also could delay exports from East Coast ports and create traffic jams at ports on the West Coast, where workers are represented by a different union.

“If the strikes go ahead, they will cause enormous delays across the supply chain, a ripple effect which will no doubt roll into 2025 and cause chaos across the industry,” Jay Dhokia, founder of supply chain management and logistics firm Pro3PL, said.

JP Morgan estimated that a strike that shut down East and Gulf coast ports could cost the economy 3.8 billion dollars to 4.5 billion dollars per day, with some of that recovered over time after normal operations resume.

The strike comes just weeks before the presidential election and could become a factor if there are shortages.