Dockworkers hit picket lines in historic US port strike that could impact prices
The strike began Tuesday morning.
Tens of thousands of U.S. dockworkers walked off the job early Tuesday morning, clogging dozens of ports along the East and Gulf coasts and potentially raising consumer prices ahead of the holiday season.
The ports account for more than half of the nation's container imports, facilitating the transport of everything from toys to fresh fruit to nuclear reactors, JPMorgan senior equity analyst Brian Ossenbeck said in a report shared with ABC News.
President Joe Biden released a statement on Tuesday emphasizing the strong profits enjoyed by shipping firms in recent years, as well as the sacrifices made by dockworkers during the COVID-19 pandemic. Biden called for a fair offer from the U.S. Maritime Alliance, or USMX, an organization bargaining on behalf of the dockworkers' employers.
"It is time for USMX to negotiate a fair contract with the longshoremen that reflects the substantial contribution they've been making to our economic comeback," Biden said in the statement.
The International Longshoremen's Association (ILA) confirmed to ABC News early Tuesday that the union's first coastwide strike in nearly 50 years was underway. The statement said that "tens of thousands of ILA rank-and-file members" started to set up picket lines at shipping ports up and down the Atlantic and Gulf coasts as of 12:01 a.m.
"We are prepared to fight as long as necessary, to stay out on strike for whatever period of time it takes, to get the wages and protections against automation our ILA members deserve," ILA President Harold Daggett said.
USMX said Wednesday it was focused on ratifying a new contract "that addresses all the critical issues the parties need to bargain."
"Reaching an agreement will require negotiating -- and our full focus is on how to return to the table to further discuss these vital components, many of which are intertwined," it said in a statement. "We cannot agree to preconditions to return to bargaining -- but we remain committed to bargaining in good faith to address the ILA's demands and USMX's concerns.
A top Biden administration official said late Tuesday that the U.S. Maritime Alliance needed to put forward a fair offer to union dockworkers.
"The parties need to get back to the negotiating table, and that must begin with these giant shipping magnates acknowledging that if they can make record profits, their workers should share in that economic success," Acting Labor Secretary Julie Su said.
Su said she spent "hours on the phone and in meetings" with both parties over the last week, urging them to find a way to reach a fair contract.
A prolonged work stoppage of several weeks or months could rekindle inflation for some goods and trigger layoffs at manufacturers as raw materials dry up, experts said.
"A strike would be very, very disruptive," said Jason Miller, a professor of supply-chain management at Michigan State University who closely tracks imports, told ABC News.
"You can't take all this freight and either send it to other ports or put it on airplanes," Miller added. "There is no plan B."
The ILA, the union representing East Coast and Gulf Coast dockworkers, is seeking higher wages and a ban on the use of some automated equipment.
"ILA longshore workers deserve to be compensated for the important work they do keeping American commerce moving and growing," the ILA told ABC News in a statement on Monday. "Meanwhile, ILA dedicated longshore workers continue to be crippled by inflation due to USMX's unfair wage packages."
Biden retains the power to prevent or halt a strike under the 1947 Taft-Hartley Act. The U.S. Chamber of Commerce sent a letter to Biden on Monday urging the White House to intervene, which it has previously said it will not do. The White House told ABC News in a statement that it has been in contact with both the union and management in recent days.
"This weekend, senior officials have been in touch with USMX representatives urging them to come to a fair agreement fairly and quickly – one that reflects the success of the companies. Senior officials have also been in touch with the ILA to deliver the same message," White House spokesperson Robyn Patterson said.
A prolonged East Coast and Gulf Coast port strike could moderately increase prices for a range of goods, experts told ABC News. That upward pressure on prices would result from a shortage of products caught up in the supply chain blockage, leaving too many dollars chasing after too few items, they added.
Food products are especially vulnerable to an uptick in prices, since food could spoil if suppliers sent the products ahead of time to minimize the strike impact, as they have done for some other goods, Adam Kamins, a senior director of economic research at Moody's Analytics, told ABC News.
Additionally, a significant share of the nation's imported auto parts pass through the ports impacted by a potential strike, which could cause an increase in vehicle prices if the strike persists.
Price increases have slowed dramatically from a peak in 2022, but inflation remains higher than the Federal Reserve's target rate of 2%. A strike could prevent further progress, according to Kamins.
"We're not talking about prices skyrocketing by any means, but I think it halts the momentum we've had over the last year or so getting inflation back in the bottle," he said.
In 2002, a strike among workers at West Coast ports lasted 11 days before then-President George W. Bush invoked the Taft-Hartley Act and ended the standoff. However, the last time East Coast and Gulf Coast workers went on strike, in 1977, the work stoppage lasted seven weeks.
Tuesday's potential work stoppage follows high-profile strikes undertaken last year by auto workers as well as Hollywood writers and actors. Most recently, 33,000 Boeing workers walked off the job in early September, demanding better pay and retirement benefits.
"Trade unions all over the country have been going out on strike," Sriram Narayanan, a professor of supply chain management at Michigan State University, told ABC News. "We're seeing that happen now at the ports."
Ahead of the historic strike, the president of the Teamsters labor union, Sean O'Brien, released a letter of solidarity to the International Longshoreman's Association, saying, "The International Brotherhood of Teamsters, including our members in the freight industry, stand in full solidarity with the International Longshoremen's Association as they fight for a fair and just contract with the ocean carriers represented by USMX."
"Don't forget --Teamsters do not cross picket lines. The Teamsters Union is 100 percent committed to standing with our Longshoremen brothers and sisters until they win the contract they deserve," O'Brien said.
ABC News' Elizabeth Schulze contributed to this report.
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