close
close

Latest Post

Geno Smith and Kenneth Walker III highlight the Seattle Seahawks' first loss New developments in the case of missing Morgan Nick will be announced on October 1st

play

Longshoremen at ports from Maine to Texas are officially on strike after the clock strikes midnight and no new labor contract is in place.

Thirty-six ports on the East and Gulf Coasts closed as 45,000 union workers walked off the job after collective bargaining between the International Longshoremen's Association (ILA) and the United States Maritime Alliance (USMX) stalled. The strike only exacerbates some temporary port closures in places like Florida, the Carolinas and Georgia as a result of Hurricane Helene.

The ILA strike is the first at these ports since 1977 and has the potential to cost the economy up to $5 billion a day, upend holiday shopping for millions of Americans and determine whether many small and medium-sized businesses and farmers will make a profit or not We will lose money this year, experts said.

“Every wasted day that a ship is not in port costs money, and sometimes a lot of money … which is ultimately passed on to consumers,” Stamatis Tsantanis, chairman and chief executive of shipping company Seanergy Maritime and United Maritime, said in a statement Explanation.

Length is important

Now that the strike has begun, experts will focus on how long the strike could last. Each day of strike could cost the economy up to $5 billion a day as imports and exports are blocked, some economists estimate.

“It's not just about the shutdown, it's also about the recovery period and how long it takes to get everything back up and running again,” said Jonathan Gold, vice president of supply chain and customs policy at the Nation Retail Federation.

Each day of the strike, it took about three to five days to clear the backlog and resume normal operations, he said. “The longer it goes on, the worse it gets,” he said.

A port strike in 2002 lasted 11 days before the Bush administration invoked the Taft-Hartley Act to force the ports to reopen. The law allows the federal government to seek a court injunction against a strike, allowing both parties to continue negotiations during an 80-day cooling-off period. It took six months to recover from those 11 days, Gold said.

Although many industry groups are calling for intervention, the Biden administration said it does not intend to invoke Taft-Hartley. Instead, the company encouraged further negotiations, saying in a statement that it would carefully monitor supply chain disruptions and “respond quickly to minimize potential disruptions in the event of a prolonged strike by engaging intensively with ports, state and local officials, “Industry and employees work together.”, shipping companies, rail and freight forwarding companies.”

What to expect: A port strike could cost the economy $5 billion every day. Here's what that could mean for you

What is affected by the strike?

Imports: With about half of U.S. maritime imports passing through East and Gulf Coast ports, a wide range of products are affected, including fruits and vegetables, automobiles, auto and machinery parts, clothing, pharmaceuticals, wine and spirits, and holiday items Toys and seafood. said experts.

“Any strike that lasts longer than a week could lead to stock shortages for the holidays,” said Eric Clark, portfolio manager at Rational Dynamic Brands Fund. “Retailers are currently idling, so inventory will be depleted and shipping and merchandise prices will rise vertically for a period of time. We could have six months of inflation that is similar to, or even worse than, peak inflation a year ago.”

Small and medium-sized businesses could suffer the most, some said.

“Large companies with dedicated procurement departments and significant access to capital have been preparing for this strike for some time, and many have ordered excess materials that they were able to finance with cheaper debt,” said Ben Johnston, chief operating officer at small business lender Kapitus.

“However, small businesses have been less likely to be able to order early and in bulk, and are less likely to raise the capital required to order larger quantities of supplies in advance,” he said.

Exports: Companies that sell products in international markets would suffer, experts said. For example, agricultural exporters of soybeans and poultry cannot ship their goods abroad and could end up losing market share or, worse, money because their goods are perishable, they said.

Jobs: Companies that keep low inventories to keep costs down, for example, may have to close production lines during a prolonged strike, Gold said. This would come at a time when the job market is already cooling.

Medora Lee is a money, markets and personal finance reporter for USA TODAY. Reach her at [email protected] and sign up for our free Daily Money newsletter every Monday through Friday morning for personal finance tips and business news.

On By John Fenwick

Leave a Reply

Your email address will not be published. Required fields are marked *

Related Post