Midnight marks just the beginning
It is 12:01 Eastern Time. That is the deadline set by the International Longshoremen’s Association (ILA) to begin their strike. There is no clear end date in sight.
That does not mean that this situation arose out of nowhere. The contract has been set to expire in September since it was signed six years ago, and ILA president Harold Daggett has been making it clear for months that he intends to call off the strike if a new framework contract is not signed by that date.
In a now apparently retracted section of their article, Reuters claimed that an anonymous source claimed that no serious negotiations have been planned or conducted since June. The article continues to report that no meetings are planned between the union and the port owners.
$540 million per day in estimated economic damage
The Conference Board, a nonprofit business research group, estimates economic damage at more than half a billion dollars for every day the strike lasts. The group also reports that these 36 ports affected by the strike account for 57% of U.S. container trade, including many of the auto parts that U.S. and global automakers rely on. These ports also handle a quarter of total U.S. trade volume.
As reported by Investopedia, shipping giant Maersk estimates that for every week the strike lasts, it will take four to six weeks to clear the backlog, and specific cases could be delayed for much longer.
Related: Ford CEO Jim Farley says no more “boring cars.”
Almost no one will be left unaffected
It’s not just car makers, dealers and people looking to buy a car that will be affected. Virtually every sector of the economy, from Amazon to farmers, construction workers to truck drivers, depends on the free flow of goods through ports for their daily activities.
If you sell a material good, use a physical tool, use supplies or raw materials, or even drive cars with an internal combustion engine, the availability and price of everything will skyrocket exponentially if the strike is not ended soon.
October surprise for both Trump and Harris
This strike comes as a kind of “October surprise” for the 2024 presidential election. But instead of being about airing dirty laundry, or rolling out a new policy promise to influence voters, this particular event falls outside the control of both candidates.
However, with the economy being a top concern in virtually every poll in every election since the first election, it is impossible for this strike not to have an impact on how some voters cast their ballots.
President Biden is on track to let things play out on their own
President Biden has been urged by as many as 177 trade associations to invoke a 1947 law called the Taft-Hartley Act, which would call for an 80-day “cooling off” period for any strike that threatens the national economy and well-being. However, Biden has been clear in his intention to step aside and let both sides resolve matters without his intervention.
He may be reluctant to declare a state of emergency so close to the election, but what is certain is that this strike puts the president in a difficult position as he must balance his pro-labor position with his commitment to strengthening of the position of the president. economy.
Related: A looming strike at ports could cripple global supply chains and cripple car imports
Retail shortages and delays in 2025 car models are almost certain
With no end in sight and dire consequences for every day the strike is allowed to continue, the retail industry is preparing for shortages of all kinds of goods that will lead to the busiest shopping season of the year, and perhaps the first. have largely recovered from the supply chain shock caused by the pandemic and the shutdowns it caused.
It is unclear at this time how severe the slowdown in new car models will be as part of this broader retail shortage. Many 2025 cars will appear on dealer lots this month and beyond, and for every day this strike lasts, the delay in their appearance can be measured in weeks.
“Machines have no families,” says ILA president
Despite all the pain this strike will cause, it is not difficult to understand why the ILA is being pressured to stick to their demands. According to ILA Harold Daggett in an interview on the ILA YouTube channel, automation and AI pose a threat not only to longshoremen, but to every American.
The previous six-year contract contained provisions that prevented fully autonomous container handling sites, which may or may not have already been broken by efforts to develop the Los Angeles port gates to operate autonomously.
The ILA wants strong guarantees that their jobs will be protected and that automation and AI will not replace workers indefinitely.
Billions of USD in growth, and employees are still feeling the pressure
Daggett, who said he was involved in the industry before containerization was even introduced, was clear that the gap between his employees’ share of profits has widened over the years. While to many Americans the proposed $6 increase over the next five years, ending in a base salary of $69, sounds absolutely dreamy, for the ILA it simply goes back to their fair share of the profits.
“They don’t make millions anymore, they make billions,” says an impassioned Daggett. He then goes on to explain that his people were the ones who took international shipping to the heights of profit it currently enjoys, and instead of being rewarded, automation is trying to get rid of that.
The dangers of heat, cold and Covid-19 were endured by ILA employees, according to Daggett, and now it’s time for them to be compensated.
Final thoughts
Every indicator so far points to no action by either side to resume negotiations. At the same time, everyone agrees that this strike will be very destructive to the economy if allowed to continue for any length of time.
Most likely (or perhaps most hopefully) this is an attitude of both the dock workers and the dock owners, and once the strike begins, we will hear about resumption of negotiations within 12 to 24 hours, and a settlement soon after.
If not, buckle up. I think Daggertt’s words best sum up how bad the situation can be: “People don’t know what a strike is anymore” and by week two “guys who sell cars can’t sell cars anymore” because that’s what they want to do. to sell.
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