Capital Economy, Business and Finance
Nearly 50,000 workers are threatening to strike at 36 US ports, including some of the biggest in the country. Talks between port owners and the International Longshoremen’s Association collapsed over the summer after rows over wages and automation. Worker contracts expire on Monday. If nothing is agreed, strikes could begin at midnight on Tuesday. Industrial action stretching from Maine to Texas would spell disaster for America’s freight network. Nearly 150 ships are already on their way to affected ports, carrying cargo with an estimated value of $34.3 billion. Shipping analysts say it’s unrealistic to reroute ships to the West Coast. Instead, ships have been told to “slow steam” on approach to delay their arrival or wait in designated areas.
The US Department of Labor has sent representatives to try and resolve the stalemate, but ports have drawn up plans and begun preparing for disruption. The White House has said it won’t enact federal law powers to force union members back to work.
Any shipping delays are likely to increase carbon emissions and impact global supply chains, which have only recently recovered from the impact of Covid and continue to be disrupted by violence in the Red Sea. Even a week-long strike in the US could cause a six-week disruption to supply chains, according to shipping firm Maersk.
Meanwhile, Maersk’s share price surged ahead of the strike. Why? On Tuesday, the company announced a local port disruption surcharge on cargo moving to and from the East Coast.
