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massive strikes broke out at u.s. east coast and gulf of mexico ports, sparking concerns about u.s. inflation

2024-10-02

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on october 1, local time, large-scale strikes broke out among dock workers on the east coast and gulf coast of the united states, and logistics began to become blocked. if the strike continues, it will be the most destructive strike in u.s. history and could lead to shortages of u.s. consumer and industrial goods, thereby exacerbating inflation.

the organizer of this strike is the international longshoremen's association (ila), which has nearly 50,000 longshoremen. the ports affected by the strike account for more than half of all container freight capacity in the united states, and a strike in one week could cause economic losses of $7.5 billion. the port most affected by the strike is the port of new york-new jersey, the third-largest u.s. port by cargo volume.

the strike started in the early morning of october 1, local time in the united states, and almost all cargo ports from maine to texas in the north have been interrupted. affected goods include bananas, european beers, wines and spirits, as well as furniture, clothing, household goods, various industrial parts and european cars, among others.

"if we were here for a month or two months, the world would collapse," harold daggett, president of the international longshoremen's association (ila), said on tuesday.

the strike broke out over a huge gap between the contract proposals of the international longshoremen's association (ila) and the united states maritime union (usmx). the american maritime alliance represents major shipping lines as well as terminal operators and port authorities.

the united states maritime alliance (usmx) proposal is for a nearly 50% wage increase over the proposed six-year contract period, exceeding all other recent union agreements while accounting for inflation. they complain that the union is not negotiating in good faith: the two sides have not met face-to-face since june. the longshoremen's union seeks an hourly wage increase of $5 per year for six years, with the maximum wage raised from $39 to $69, which is equivalent to nearly 80% of the wage increase.

since the coronavirus pandemic, global shipping demand has surged and shipping rates have soared as supply chains have been disrupted. data analysis shows that from 2020 to 2023, the shipping industry’s profits will exceed us$400 billion, which is greater than the previous total industry profits since the beginning of containerization in 1957.

“they’ve made billions of dollars since the pandemic hit,” said daggett, the union leader. "but they don't want to share. they'd rather see a fully automated terminal on the east coast where they can make more money."

there is also a dispute between dock unions and terminal management over the use of automation at the port, which the union says will cost some members their jobs.

the u.s. department of transportation said in a statement on october 1 that it has been in contact with shippers, ocean carriers, ports, railroads and other supply chain partners for months to prepare for possible strikes and try to ease supply bottleneck in the chain.