Strikes at ports on the East Coast and the Gulf Coast could upend the economy and vacations
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Strikes at ports on the East Coast and the Gulf Coast could upend the economy and vacations

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Longshoremen in ports from Maine to Texas officially went on strike at the stroke of midnight, and no new labor agreements have been made.

Thirty-six ports on the East Coast and Gulf Coast were closed as 45,000 union workers walked off the job after labor negotiations between the International Longshoremen’s Association (ILA) and the United States Maritime Alliance (USMX) stalled. The strike only exacerbates temporary port closures in places like Florida, the Carolinas and Georgia in the wake of Hurricane Helene.

The ILA strike is the first at these ports since 1977 and could cost the economy as much as $5 billion a day, upend the holiday shopping of millions of Americans and determine whether many small and medium-sized businesses and farmers turn a profit or not. year to lose money – experts say.

“Every day of inactivity that a ship does not come into port costs money, sometimes a lot of it… which ultimately goes to consumers,” Stamatis Tsantanis, president and chief executive of shippers Seanergy Maritime and United Maritime, said in a statement.

Length matters

Now that the strike is underway, experts will focus on how long it may last. Some economists estimate that each day of strike could cost the economy as much as $5 billion a day due to the blockage of imports and exports.

“It’s not just about downtime, it’s also about the recovery period and the time it takes to get back up and running,” said Jonathan Gold, vice president of supply chain and customs policy at the Nation Retail Federation.

He added that for every day of strike, it would take about three to five days to clear the backlog and resume normal operations. “The longer it goes on, the more complicated it gets,” he said.

The 2002 port strike lasted 11 days before the Bush administration invoked the Taft-Hartley Act to force the ports to reopen. The bill allows the federal government to ask the court for an injunction against the strike to allow both sides to continue negotiations during an 80-day grace period. Gold said it took six months to recover from those 11 days.

Even though many industry groups have called for intervention, the Biden administration has said it has no intention of invoking Taft-Hartley. Instead, it encouraged further negotiations and said in a statement that it would closely monitor supply chain disruptions and “react quickly to help minimize potential disruptions in the event of an extended strike by working broadly with ports, state and local officials, industry, workers, carriers ocean, railway and shipping companies.”

What to expect: A port strike could cost the economy $5 billion a day. Here’s what this could mean for you

What does the strike affect?

Import: With approximately half of U.S. ocean imports passing through ports on the East Coast and the Gulf Coast, this affects a wide range of products, including agricultural products, automobiles, auto parts and machinery, clothing, pharmaceuticals, wines and spirits, and vacation goods such as like toys and seafood, experts said.

“Any strike that lasts longer than a week could result in merchandise shortages for the holidays,” said Eric Clark, portfolio manager of the Rational Dynamic Brands Fund. “Retailers are currently operating in lean mode, which means inventory is down and shipping and merchandise prices will continue to rise vertically for some time. For 6 months, we could see inflation at a level similar to or worse than the peak inflation level a year ago.”

Some say small and medium-sized businesses will suffer the most.

“Large companies with specialized procurement departments and significant access to capital have been preparing for this strike for some time, and many of them ordered excess materials that they were able to finance with cheaper debt,” said Ben Johnston, chief operating officer at small business lender Kapitus.

“However, small businesses were less likely to be able to place orders in advance and in bulk, and are less likely to obtain the capital required to order larger quantities of supplies in advance,” he said.

Export: Experts say companies selling products to international markets will suffer. For example, agricultural exporters of soybeans and poultry will not be able to ship their goods abroad, which could result in a loss of market share or worse, a loss of money because their goods are perishable, they say.

Work: For example, Gold said that companies keeping low inventories to keep costs low will have to shut down assembly lines as the strike continues. This would happen at a time when the labor market is already cooling down.

Medora Lee is a money, markets and personal finance reporter for USA TODAY. You can contact her at [email protected] and sign up for our free Daily Money newsletter, where you’ll find personal finance advice and business news Monday through Friday mornings.

Website http://loconrepta.biz.id

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