Conor here: Let’s hope a new contract (whenever it is reached) will expire on April 30, 2028 — the day before a potential general strike.
That’s because, according to WSWS, East and Gulf coast dockworkers are playing a weak hand due a lack of solidarity from West Coast dockworkers and railroad labor:
The Class I railroads are assisting in the effort, with North American operator CSX declaring that if a strike were to occur, they would “work port by port to take traffic … as long as [it] can safely access the terminal” and would accept imports “up until the port goes on strike.” The railroads would also play a key role in moving cargo diverted to the West Coast back to the eastern United States.
For the past several months, the West Coast ports have also seen a steady rise in volume as corporations redirect shipping to the opposite side of the country. By July, the West Coast share of US inbound cargo jumped to 50 percent, compared to a low of 44 percent at the same time last year.
These numbers are likely to go up further. The Ports of Los Angeles and Long Beach are currently at 80 percent and 70 percent capacity respectively as of September, meaning they have room for more cargo and may even be prepared to go over capacity.
By Anna Nagurney, professor and Eugene M. Isenberg Chair in Integrative Studies at UMass Amherst. Originally published at The Conversation.
Whether you’re buying a can of sardines or a screwdriver, getting products to consumers requires that supply chains function well.
The availability of labor is essential in each link of the supply chain. That includes the workers who make sure that your tinned fish and handy tools smoothly journey from their point of origin to where they’ll wind up, whether it’s a supermarket, hardware store or your front door.
Amazingly, 90% of all internationally traded products are carried by ships at some point. At the height of the COVID-19 pandemic, it was hard not to notice the supply chain disruptions. For U.S. ports, there were many bouts of congestion. Demand for goods that were either more or less popular than they would normally be became volatile. Shortages of truckers and other freight service providers wreaked havoc on land-based and maritime transportation networks.
Consumers became exasperated when they saw all the empty shelves. They endured price spikes for items that were suddenly scarce, such as hand sanitizer, computer equipment and bleach.
I’m a scholar of supply chain management who belongs to a research group that studies ways to make supply chains better able to withstand disruptions. Based on that research, plus what I learned while writing a book about labor and supply chains, I’m concerned about the turmoil that could be around the corner for cargo arriving on ships.
Concerns Over Pay and Technology
The International Longshoremen’s Association’s six-year contract with the East Coast and Gulf Coast ports will expire on Sept. 30, 2024, at midnight unless the two sides reach an agreement before that deadline. Without a breakthrough, the 45,000 port workers intend to take part in a strike that would paralyze ports from Maine to Texas.
Should they walk off the job, it would be the first such work stoppage for the East Coast ports since 1977.
Labor and management disagree over how much to raise wages, and the union also wants to see limits on the use of automation for cranes, gates and trucks at the ports in the new contract. The union is seeking a 77% increase in pay over the next six years and is concerned that jobs may be lost because of automation.
Dockworkers on the West Coast, who are not on strike, are paid much higher regular wages than their East Coast and Gulf Coast counterparts who are preparing for a strike. The West Coast workers earn at least an estimated US$116,000 per year, for a 40-hour work week, versus the roughly $81,000 dockworkers at the East Coast and Gulf Coast ports take home, not counting overtime pay.
Management is represented in the talks by the U.S. Maritime Association, which includes the major shippers, terminal operators and port authorities.
White House officials are calling for dock workers and port operators to settle their differences as a strike looms.@MrSethHarris, former top labor policy advisor to President Biden, joins Yahoo Finance to discuss: pic.twitter.com/rund2TWQI3
— Yahoo Finance (@YahooFinance) September 27, 2024
What to Expect if There’s a Strike
As many as 36 ports would have to stop operating if a strike happens, blocking almost half of the cargo going in and out of the U.S. on ships.
If the strike lasts just a day, then it would not be noticeable to a typical consumer. However, businesses of all kinds would no doubt feel the pinch. J.P. Morgan estimates that a strike could cost the U.S. economy $5 billion every day.
Even if only a one-day strike happens, it could take about five days to straighten out the supply chain.
If a strike lasts a week, the results would quickly become apparent to most consumers.
Some shipping companies have already begun to reroute their cargo to the West Coast. Even if there’s no strike at all, costs will rise and the warehouses could run out of room.
The effects on everything from bananas and cherries to chocolate, meat, fish and cheese could be severe, and the shipping disruption could also hamper trade in some prescription drugs if the strike lasts at least a week.
If the strike were to last a month or more, supplies needed by factories could be in short supply. Numerous consumer products would not be delivered. Workers would be laid off. U.S. exports, including agricultural ones, might get stuck rather than shipped to their destinations. Inflation might increase again. And there would be a new bout of heightened economic anxiety and uncertainty – along with immense financial losses.
All the while, West Coast ports would face unusually high demand for their services, wreaking havoc on shipping there too.
Yes, We’d Have No Bananas
My research group’s latest work on supply chain disruptions and the effects of various transportation disruptions, including delays, quantifies the impact on the quality of fresh produce. We did a case study on bananas.
This isn’t a niche problem.
Bananas are the most-consumed fresh fruit in the U.S.
Many of the bananas sold in the U.S. are grown in Ecuador, Guatemala and Costa Rica. About 75% of them arrive at ports on the East and Gulf coasts.
Although bananas are relatively easy to ship, they require appropriate temperatures and humidity. Even under the best conditions, their quality deteriorates. Long delays will mean shippers will be trying to foist mushy brown bananas on consumers who might reject them.
Alternatively, banana growers may opt to find other markets. It’s reasonable to expect to find fewer bananas and much higher prices – possibly of a lower quality. Flying bananas to the U.S. would be too expensive to sustain.
Fresh meat and other refrigerated foods could spoil before they can complete their journeys, and fresh berries, along with other fruits and vegetables, could perish before reaching their destinations.
If there’s a port strike, tons of fresh produce, including bananas, that would arrive after Oct. 1 would end up having to be discarded. That is unfortunate, given the rising food insecurity rate in the U.S.
1947 Taft-Hartley Act
More than 170 trade groups are urging the Biden administration to intervene at the last minute to avoid a strike.
The government can invoke the 1947 Taft-Hartley Act, which allows the president to ask a court to order an 80-day cooling-off period when public health or safety is at risk.
However, President Joe Biden reportedly does not plan to invoke it – even as he urges the two sides to settle their differences.
So if you’re planning to bake banana bread or were thinking you might get an early start on your holiday shopping, I’d advise you to make those shopping trips as soon as possible – just in case.
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Car parts. I was reading an article saying that if there is a strike that spare car parts would disappear so that it might be wise to get that work done on you car now when there are still spare parts in the pipeline. You know who should really be involved in all this? The US Secretary of Transportation, that’s who. Lemme check the table of organization to see who that would be. Oh. Never mind. It’s Pete Buttigieg aka the Invisible Man. Must still be on maternity leave or something.
I’m sure he’ll write a sternly worded letter or something. He could still be taking harsh actions on the railroads for the East Palestine, OH. disaster…
He’s probably checking the boxes on doing the barest of minimums to polish his resume for higher office.
very broadly speaking, the older the car (say 10 years), the higher odds that the only source of new parts is outside of North America.
And other people can speak about this….but ***anecdotally***, there seems to be a “competency crisis” in car parts quality.
sure you can preventatively replace the original alternator on your 12 year-old car….but then the replacement might fail in 6 months.
one of those damned if you do, damned if you don’t moments.
Or replace it, but take the old one to a auto electric shop to rebuild it with new bearings and brushes.
Junkyards, aka Auto Recycling Centers, are a reasonable source for serviceable used parts.
His cabinet appointment was a pay-off for playing a role in 2020 D primary kabuki theater.
Recommended reading: Ninety Percent of Everything (Rose George)
“For Ninety Percent, I set sail from Felixstowe through Suez to Singapore on a ship the length of three football fields and the height of Niagara Falls; I boarded a Portuguese frigate doing anti-piracy patrols in the Indian Ocean; I went to Cape Cod to understand why manmade noise from shipping is damaging whales, mammals, fish and the ocean; and I met seafaring chaplains seeking to defend the often-neglected rights of the 1.5 million seafarers who bring us ninety percent of everything, for little gratitude.”
While LA and Long Beach ports may have unused capacity I doubt that BNSF or Union Pacific could pick up 30% more container traffic to ship it eastward. Likewise for the ports in BC, Vancouver and Prince Rupert served by Canadian National and CPKC. PSR has created a system of operations that has constricted capacity by ripping out facilities, storing cars and locomotives (like these 300 in AZ, hundreds more in UT and WY) and reducing workers by 30%.
Norfolk Southern proposes to haul containers from the west for pickup at various under-utilized facilities in the east. But the devil is in the detail; the crews handling trains from east coast ports cannot be easily redeployed and are unqualified to operate in the alternative locations. It’s more complicated that having a truck driver go to point B instead of Point A. Those skills are easily transferable, railroad skills are not.
From the above locomotive storage link: “Editors Note: It has come to our attention that this train graveyard no longer exists…” Not sure what, if anything, this says about your other points.
Only in the last few months has truck traffic at the Ports of Los Angeles and Long Beach (largest in the W hemisphere) returned to levels that were normal before Covid19. In 2019, there were routinely miles-long lines of trucks (HDDT) on the I-710 waiting to get into the port (I have been periodically conducting air quality surveys at the ports).
My SWAG, it will be challenging (high friction) to clear much higher clearance volumes by HDDT traffic.
HDDT – Heavy Duty Diesel Truck
Mushy brown bananas are the best kind for banana bread, and can be put in a freezer for later use.
Don’t forget the pecans, so tasty and one of the most sustainable of nuts.
Another unmentioned side effect of a strike on the East Coast and the Gulf Coast ports would be a disruption in the flow of Liquified Natural Gas from America to Europe. I don’t know the length of time those cargos are at sea, but some disruption in the chain will occur. So, not only America will be affected by this. Add to the above that this strike comes at the beginning of the Fall/Winter season in the Northern Hemisphere. Couldn’t happen at a “better” time. All that Russian natural gas that used to supply Europe now going to places East. Makes one wonder.
I read somewhere else (likely ZH), that this will basically only impact containerized freight, not moving bulk product like coal, iron or LNG.
Interesting point. I wonder if that could be because those sorts of ports are mainly non-union, or because of extensive automation of the loading and unloading processes?
Seen in a FreightWaves piece today, the other effected cargo is “ro-ro.” Wasn’t explained in the piece, but that stands for “roll on-roll off” (meaning cars and trucks etc).
Living near one of the ports on the Great Lakes, those bulk commodities terminals are still union, just not the same one that’s facing the potential strike. Just like the Great Lakes region of the ILA bargains separately from the West Coast and the ones in question here.
Had to dig a little to learn the difference between the ILA and the IBL which used to compete. The latter was eventually rolled into the former (don’t recall the year offhand), but the IBL had basically claimed the West Coast ports. Explains why they aren’t in sync for contract agreements.
Why the Great Lakes region is yet again different, I don’t know.
Could be some non-union workers around, but I doubt it. 20yrs ago a friend of mine worked at one of the grain elevators, hated his union.
Thank you. I was not fully aware of the ‘fragmentary’ nature of American freight handling unions. Interesting point of departure since I work from the idea that the business side of the equation is fairly well unified in their dealings with the unions. Correct me if I am wrong. I might be giving the business interests more credit than they deserve.
Stay safe.
@ ambrit September 29, 2024 at 10:30 am
Unfortunately, the wonderment does not extend to the compradors in the leadership of the EU.
I am gully supportive of a long strike if 29nly to show the US public how idiotic our current system is. One small disruption and it’s endangered.
[Sorry posted this to links comments — submitting here with link to Sal Macogliano’s video.] The argument about a weak hand for the East Coast union may be a bit of an exaggeration. It’s worth noting that WSWS doctrinally hates unions. Not that they’re wrong about a lack of solidarity, a bridge that was crossed many, many decades ago, but it’s a like a Murdoch publication pointing to the evils of organized labor, just from a different perch. And in any event, existent backlogs on West Coast ports, and the economic and logistical difficulties of rerouting cargo to the West Coast, likely are more consequential than that lack of solidarity.
Thi excellent recent video at What’s Going On With Shipping has details on how the strike would cripple imports, without any assistance from other unions. https://youtu.be/hr-isyMV1y8?si=H3ycz9i4kgOtJ-bz
I’m buying extra sardines today.
In 2019 I spent four weeks total traveling to and from Europe by containerships, as one of only two passengers aboard with 20-30 crew members and over 4000 shipping containers. It was one of the most fascinating experiences of my life. I felt like I had entered into a different world, yet it is a world very a part of our modern lives, but invisible to most people. Maritime shipping holds modern life together and I don’t think most people think about the journeys of the material things that make up their life and surroundings. It’s only when there are disruptions that make this side of our material lives a little more transparent.
Why have the East Coast and Gulf Coast dockworkers accepted the large pay disparities with the West Coast dockworkers all his time? They should have gone on strike long ago.
The ports are betting on Biden invoking Taft-Hartley.
Biden probably won’t.
Harris probably would.