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as the first day of the east coast longshoremen strike unfolds, economists are trying to quantify the cost of supply chain disruptions caused by the closure of every major maritime trade gateway from boston to houston: estimates range from $1 billion to $1 billion per day. ranging from us$5 billion.

starting on october 1, local time, dockworkers on the east coast and gulf coast of the united states began the first large-scale strike in nearly 50 years. after negotiations for a new labor contract broke down due to wage issues, about half of the country's ocean shipping was interrupted. .

the biden administration once again stated that it would not use its power to end the strike, and on the 1st it put pressure on dockworker employers to increase their contract offers to reach an agreement. a person with knowledge of the negotiations said the two sides held talks but no active negotiations took place later in the day and the strike was set to enter its second day.

none of the people in the u.s. shipping industry interviewed by china business news believed that the strike would end soon. roger, who has been engaged in u.s. line transportation in california for many years, told china business news that shipping companies have successively announced notices of suspending export bookings earlier. in particular, export cabinets from the inland united states to the railway are basically closed. stopped.

he said that there are not many plans left for shipowners, and whether to change the port depends on the judgment of the length of the strike. if the strike ends in a few days, there is no need to change ports. if you finally choose to wait at the anchorage, once the terminal reopens, it is expected that the port authorities in various places will arrange the order of unloading ships in accordance with the handling of the dasai port incident in 2021-2022.

he predicts, "the general consensus in the industry is that the impact of a one-week strike will take 4-6 weeks to recover. if unfortunately it lasts for two weeks or more, the negative impact will last until next year."

the international longshoremen's association (ila), which represents 45,000 port workers, has been negotiating a new six-year contract with the united states maritime alliance (usmx) employer group, with negotiations ending at midnight u.s. time on september 30.

just before the strike, the plot continued to reverse. first, usmx issued a statement saying that it can increase wages by 50% over six years, but it must retain the automation clauses in the contract.

subsequently, the ila issued a statement saying that it rejected the usmx's final proposal to close all ports from maine to texas at 12:01 a.m. et on october 1, adding that the usmx's proposal "falls far short of its members." requirements for approval of new contracts”.

harold daggett, head of the ila, said employers such as container ship operator maersk had failed to raise wages appropriately or agree to halt job-threatening port automation projects.

the strike is the ila's first major work stoppage since 1977, worrying businesses that rely on ocean shipping to export goods or secure vital imports.

according to statistics, the strike affects 36 ports including new york, baltimore and houston, which handle a range of containerized goods from bananas to clothing to cars.

roger explained that the commonly known east coast actually stands for "east coast and the gulf of mexico", that is, the docks from boston in the north to houston in the south will be affected. the east coast ink bay terminal handles approximately 500,000 20-footers per week. containers (teu), the impact of the strike is indeed huge.

an analysis of data from bloomberg economics shows that the strikes are costing the u.s. gross domestic product (gdp) as much as $3 billion a day due to lost spending and production. a week-long strike could reduce annualized gdp by 0.3 percentage points.

an analysis report by jpmorgan chase estimates that the strike will cost the u.s. economy $5 billion a day, while also damaging u.s. retail and supply chains.

john wrenn, chief operating officer of mhw ltd., a manhasset, n.y.-based beer, wine and spirits distributor, said he is worried about how to get products across the ocean in time for the holiday season and still make a profit. .

currently, shipping a 40-foot container (feu) from europe to the u.s. costs about $4,000 to $5,000, but peak season and strike-related surcharges now add another $1,500 to $2,000. in just a few weeks, shipping costs have increased by 30% to 40%.

warren said that shipping goods into the united states via the west coast does not yet look feasible, and air freight is prohibitively expensive. "it won't be long before this situation snowballs and has a real impact on the holiday season." "

a walmart spokesperson said the company is prepared for supply chain disruptions and maintains additional sources of supply. costco executives said last week that they expected the strike to affect most of the non-food items the company imports. non-food items make up about 25% of costco's total business, and the company has been shipping holiday merchandise and some products in advance of the strike.

meanwhile, u.s. automakers that rely heavily on shipping, and others that rely on foreign-made parts and export sales, have launched plan b in hopes of avoiding widespread problems.

a spokesperson for toyota motor corporation's u.s. operations said on september 30 that the company is paying close attention to the development of the situation and is formulating contingency plans to minimize the impact on car buyers and dealers. the automaker has prepared for a possible strike by building extra inventory, but a spokesman did not specify how much.

a spokesman for general motors said the company has developed contingency plans and has been increasing parts inventories. south korea's hyundai motor co. has a plant in alabama and relies on ports in philadelphia and georgia. "our logistics subsidiary is closely monitoring labor conditions and developing contingency measures every day to ensure stable processing and delivery of hyundai vehicles," a company spokesperson said via email.

"past experience tells us that many impacts will only appear after a few months. for example, empty containers from the east coast cannot return to asia in time." roger explained to the china business news reporter, "the spring festival in 2025 is at the end of january. in december, we started to rush for goods before the holiday. originally, the empty containers shipped from the us east coast in october were just used for shipment in december. will the empty container window period of several weeks caused by the strike lead to a shortage of containers on a large scale? will the us-western freight rates be significantly increased? "these are all unknown."

daggett said on the 1st that he was prepared to fight for a long time if necessary. no matter how long the strike takes, "we will persist in the strike to get the wages and protection against automation that our members deserve."

he said the union is pushing for more raises, including $5 an hour per year in the new six-year contract.

usmx said in a statement: "the nearly 50% wage increase we are currently proposing exceeds all other recent union solutions, while also addressing inflation and recognizing the work of the ila to keep the global economy running. of hard work.”

it is worth noting that the white house is also involved this time, saying that it is time for usmx to negotiate a fair contract for workers.

white house press secretary karine jean-pierre said: "shippers have experienced record profits since the pandemic began, with profits increasing by more than 800% in some cases."

she said it was only fair that dockworkers, who had taken risks to keep the ports open during the pandemic, had their wages meaningfully increased.

acting u.s. labor secretary julie su said, “both sides need to return to the negotiating table, and first they must get these shipping giants to admit that if they can make record profits, their workers should also share in this economic success.”

u.s. transportation secretary buttigieg called on ocean carriers to cancel surcharges that may be imposed after the strike. usmx declined to comment.

roger explained to china business news that during the election period, the white house certainly does not want to offend voters, nor does it want to provide the republican party with an excuse to attack itself.