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Strike at ports could fuel inflation, snarl supply chain

PHILADELPHIA — A strike by dockworkers at 36 ports from Maine to Texas, the first in decades, could snarl supply chains and lead to shortages and higher prices if it stretches on for more than a few weeks.

Workers began walking picket lines early Tuesday in a strike over wages and automation even though progress had been reported in contract talks. The contract between the ports and about 45,000 members of the International Longshoremen’s Association expired at midnight.

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

Workers at the Port of Philadelphia walked in a circle outside the port and chanted “No work without a fair contract.” The union, striking for the first time since 1977, 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 want a fair contract that doesn’t 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,” Butler said.

He said the union will strike for as long as it needs to get a fair deal, and it has 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 U.S. Maritime Alliance, which represents the ports, said Monday evening that both sides had moved off 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’s necessary to make up for inflation and years of small raises. ILA members make a base salary of about $81,000 per year, but some can pull in over $200,000 annually with large amounts of overtime.

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 alliance also said its offer tripled employer contributions to retirement plans and strengthened health care options.

The union wants a complete ban on automation. It wasn’t clear just how far apart both sides are.

In a statement early Tuesday, the union said it 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 say consumers won’t see an immediate impact from the strike because most retailers stocked up on goods, moving ahead shipments of holiday gift items.

But if it goes more than a few weeks, a work stoppage could lead to higher prices and delays in goods reaching households and businesses.

If drawn out, the strike will 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 and artificial Christmas trees to cars, coffee and fruit.

The strike will likely have an almost immediate impact on supplies of perishable imports like bananas, for example. The ports affected by the strike handle 3.8 million metric tons of bananas each year, or 75% of the nation’s supply, according to the American Farm Bureau Federation.

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

Shipping containers are stacked in the Port of New York and New Jersey in Elizabeth, N.J., in May 2021. AP PHOTO/SETH WENIG
Striking Philadelphia longshoreman picket early Tuesday outside the Packer Avenue Marine Terminal Port. AP PHOTO/RYAN COLLERD