Dockworkers go on strike for the first time in almost 50 years. What's impacted and how long will it last?
No, toilet paper shouldn't be impacted, according to experts.
Around 45,000 dockworkers went on strike Tuesday for the first time in almost 50 years, in a move that could temporarily put up to 105,000 workers out of work.
Thirty-six East and Gulf Coast ports from Maine to Texas are affected after labor negotiations stalled between the International Longshoremen’s Association (ILA), the largest union of maritime workers in North America, and the U.S. Maritime Alliance (USMX), which represents the employers of the longshore industry.
The strike could result in one of the greatest supply chain disruptions since COVID-19.
“If it lasts for more than a few days or more than a week, you’re going to get massive cascading effects,” Ryan Peterson, the founder and CEO of Flexport, told Yahoo Finance. Peterson added that the stoppage would affect 15% of the world’s container ships.
Why did the dockworkers go on strike?
Simply put: The ILA wants higher wages. USMX said in a statement that it has been negotiating contracts with the ILA since May.
"Our members top out at $39 (per hour). We are looking for a 77%, close to 77% increase over the next seven years. When you look at the cost of inflation, that's more than reasonable," Johnnie Dixon, president of the Fort Lauderdale chapter of the ILA, told CBS News.
On Sept. 26, USMX filed an Unfair Labor Practice (ULP) with the National Labor Relations Board in an attempt to legally require the ILA to keep bargaining and not go on strike.
A source told Reuters that USMX made a new offer on Monday to try to curtail the strike from happening, but ILA called it “an unacceptable wage package that we reject.”
What products are affected by the port strike?
In an ILA video uploaded to YouTube last month, ILA President Harold Daggett warned that the coastwide strike would “cripple” the U.S. economy. “Everything in the United States comes on a ship,” he said.
Nonperishable goods, like fresh fruit and vegetables, will be most affected — especially imports coming from Central and South America. The American Farm Bureau Federation (AFBF) reports that 75% of bananas in the U.S. come in through ILA ports, along with almost 90% of cherries, 82% of hot peppers, 80% of chocolate and 85% of canned food.
A majority of U.S. imports of beer, wine, whiskey, scotch and rum also come into ILA’s ports, as well as more than 100 other categories of food.
The AFBF also noted that U.S. exports sent out through ILA ports will be affected, including 80% of the country’s poultry exports, 56% of raw cotton exports, 36% of red meat exports, 30% of dairy product exports and 6% of soybean exports.
“A strike would create backlogs of exports, denying farmers access to a higher price in the world market, leading to a domestic oversupply, driving down prices for key commodities … and further eroding farm profitability,” the AFBF reported. “On the import side, shortages and delays would raise costs for consumers — particularly for perishable goods.”
It's not just food that will be affected
Almost 180 trade associations that represent companies across numerous industries warned that the strike would be “devastating” in a Sept. 17 letter to President Biden. These industries include automakers, chain drugstores, retailers, toy companies and furniture manufacturers.
No, you don't need to panic-buy toilet paper
There are toilet paper shortages in stores across the U.S., but it is not a direct result of the port strike — instead, it's people panic-buying supplies.
More than 90% of tissue products are produced in domestic factories, however, if the port strike lasts for several weeks or months, delays could affect the raw materials used to produce toilet paper, according to Ronalds Gonzalez, an associate professor in the Department of Forest Biomaterials and North Carolina State.
Gonzalez noted that in a worst-case scenario where the port strikes significantly impact the raw material imports, commercial-grade toilet paper, which is made from recycled paper sourced domestically, will still be available to shoppers.
What is the economic impact?
Experts have estimated that the strike could cost the U.S. economy $540 million or up to $5 billion daily.
If the strike lasts for more than a few weeks, it could negatively impact supply chains, cause shortages or increase prices. Experts say consumers will likely not notice a difference for at least a few weeks.
Depending on the length of the strike, which will affect the shortages of goods, consumers could experience price hikes and economic setbacks, similar to postpandemic supply chain issues.
Sea-Intelligence, a shipping advisory firm based in Copenhagen, Denmark, estimated that it would take anywhere from four to six days to clear the backlog that accumulated following just a one-day strike. Should the strike last a week, the group anticipates recovery will last longer than a month.
