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About 45,000 union members could walk out of work at seaports on the U.S. East and Gulf Coasts on Oct. 1, cutting off key trade routes just weeks before the country's presidential election.

A strike could cost the U.S. economy $5 billion a day, according to a JPMorgan analysis.

The strike could hit 36 ​​ports that handle about half of U.S. maritime imports. This could affect the availability of a range of goods, from bananas to clothing to cars shipped by container, while causing weeks of backlogs at ports. Logistics experts say it could also lead to rising shipping costs, potentially being passed on to voters already frustrated by housing and food inflation.

What is behind the possible port strike?

The International Longshoremen's Association (ILA), which represents workers at ports from Maine to Texas, and the employers group United States Maritime Alliance appear to have reached an impasse over pay. The current six-year contract expires at midnight on September 30th.

A strike at all ports on the East Coast and Gulf of Mexico would be the first for the ILA since 1977.

The White House said it was not trying to help negotiate a deal, as was the case in West Coast talks last year, and a Biden administration official said the president would not use his federal powers to negotiate one Block strike.

A widespread and protracted strike could lead to shortages and increased costs across a wide range of industries.

What do dock workers do?

Dock workers, also known as dock workers, take care of the cargo of incoming ships. They work primarily on container ships, but also do some work on car transporters and cruise ships.

They operate cranes that retrieve containers from ships for “lashing,” secure cargo containers so they don’t fall during transit, and complete paperwork.

The ports handled $38 billion worth of vehicle imports last year

According to data from S&P Global Market Intelligence, ports covered by the contract processed $37.8 billion in vehicle imports in the 12 months ended June 30, 2024. The Port of Baltimore, Maryland is the nation's leader in automobile transportation.

Auto parts are also a major import on the East Coast and Gulf of Mexico, with shipments from Europe more difficult to reroute than those from China, logistics experts say.

The ports also lead the U.S. in shipments of machinery, manufactured steel and precision instruments, totaling $97.4 billion, $16.2 billion and $15.7 billion, respectively, according to data from S&P Global Market Intelligence showed.

US agricultural exports and imports at risk due to port strike

About 14% of all U.S. agricultural exports by waterway would be at risk from a strike. According to the American Farm Bureau Federation, the potential value of these exports over a one-week period is estimated at $318 million.

Additionally, 53% of the volume of U.S. agricultural imports by water is vulnerable to a strike, resulting in a potential economic impact of over $1.1 billion per week, according to the Farm Bureau.

Three-quarters of the country's banana imports from countries like Guatemala and Ecuador end up at ports on the East and Gulf coasts, said Jason Miller, interim head of Michigan State University's supply chain management department.

Regardless, the US imports coffee and cocoa in large quantities and exports cotton.

A strike would also affect container exports of soybeans, soy meal and other products and have a significant impact on chilled or frozen meat and eggs, said Mike Steenhoek, executive director of the Soy Transportation Coalition.

The $18 billion-a-year U.S. beef and pork export market and the $5.8 billion poultry and egg export sector rely on reefer containers that cannot sit idle for long.

About 45% of all waterborne U.S. pork exports and 30% of beef exports were shipped through East and Gulf Coast ports in the first seven months of this year, said Joe Schuele, spokesman for the U.S. Meat Export Federation.

More than a quarter of all U.S. egg and egg product exports and about 70% of all poultry meat exports ship from ports on the East and Gulf Coasts, according to customs data and the USA Poultry & Egg Export Council.

The affected ports also handle more than 91% of container imports and 69% of container exports of U.S. pharmaceutical products, according to Everstream Analytics.

More than a third of containers of life-saving medicines leaving the United States leave the port in Norfolk, Virginia, while nearly a third of containerized drug imports enter the country through the port in Charleston, South Carolina.

Retailers are rushing deliveries of Christmas items

Retail accounts for around half of all container volumes. Many U.S. retailers have already rushed to ship end-of-year Christmas items.

According to S&P Global Market Intelligence, the ports that would be affected by a possible strike transport more than half of the country's knitted and non-knitted clothing, worth a total of $32.8 billion, as well as furniture worth $23.4 billion .

Although the Gulf Coast ports of Houston and New Orleans are important hubs for oil and gas shipments, these commodities would be largely spared from a strike involving more labor-intensive container freight. The same applies to coal exports from Norfolk, Virginia, experts said.

However, the ILA has pledged to handle military cargo and serve passenger cruise ships during a strike.

A one-week shutdown could lead to a six-week recovery, Maersk estimates

Overall, a strike would increase the cost of shipping while causing long delays.

The five largest ports in the negotiating group – New York and New Jersey; Savannah, Georgia; Houston; Norfolk; and Charleston — more than 1.5 million 20-foot equivalent units (TEUs) were handled in August, worth $83.7 billion, according to John McCown, senior fellow at the Center for Maritime Strategy. About two-thirds of that cargo was inbound and the rest was outbound, he said.

Logistics experts warned that trade disruptions due to a work stoppage would begin immediately and cause problems in the supply chain.

Analysts at Sea-Intelligence, a Copenhagen-based shipping consultancy, estimated it could take between four and six days to clear the backlog of a one-day strike.

Maersk, one of the largest maritime transport providers and a member of the employers' group, warned that a week-long shutdown could require up to six weeks of recovery time, “with significant backlogs and delays worsening with each passing day.”

(Reporting by Lisa Baertlein in Los Angeles, Karl Plume and Tom Polansek in Chicago, Marcelo Teixeira in New York and David Shepardson and Jarrett Renshaw in Washington; Editing by Anna Driver, William Maclean and Deepa Babington)

On By John Fenwick

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