Dockworkers' strike could push up prices and cause shortages if it lasts for weeks

PHILADELPHIA -- From Maine to Texas, dockworkers at 36 ports across the eastern U.S. are now on strike for the first time in decades. And the work stoppage could snarl supply chains — leading to shortages and higher prices if it stretches on for more than a few weeks.

Workers began walking picket lines early Tuesday in a strike over wages and the ports' use of automation, though some progress had been reported in the latest contract talks. The contract between the ports and about 45,000 members of the International Longshoremen’s Association expired at midnight.

The strike also comes just weeks before a tight presidential election and could become a factor if there are shortages that affect voters.

In early picketing, workers outside the Port of Philadelphia walked in a circle and chanted, “No work without a fair contract.” The union, which is striking for the first time since 1977, posted message boards on the side of a truck reading: “Automation Hurts Families: ILA Stands For Job Protection.”

Boise Butler, president of the union local, asserted that the workers want a fair contract that doesn’t allow for the automation of their jobs.

The shipping companies, Butler argued, made billions during the pandemic by charging high prices.

“Now," he said, “we want them to pay back. They’re going to pay back.”

Butler said the union plans to strike for as long as it needs to achieve a fair deal and has valuable leverage over the companies.

“This is not something that you start and you stop,” he said. “We're not weak,” he added, pointing to the union's vital importance to the nation's economy.

At Port Houston, at least 50 workers started picketing around midnight local time carrying signs saying, “No Work Without a Fair Contract."

The U.S. Maritime Alliance, which represents the ports, said Monday evening that both sides had moved off their previous wage offers. But no deal was reached.

Labor experts maintain that the workers on strike command a lot of leverage. The union's most recent contract with the alliance was negotiated before the COVID-19 pandemic. Factors ranging from inflation to concerns about evolving technology have boosted the workers' standing to demand more.

“This is a very opportune time,” said William Brucher, an assistant professor of labor studies and employment relations at Rutgers University.

Even though inflation has diminished, he noted, the cost of living is still much higher than it was before COVID-19, which means the buying power of workers' wages has shrunk.

Brucher also pointed to momentum from other labor activity over recent years as unions across industries have demanded more and seen companies provide concessions as a result.

Leading to the strike, the union's opening offer in the talks was for a 77% pay raise over the six-year life of the contract, with President Harold Daggett saying it’s necessary to make up for inflation and years of small raises. ILA members make a base salary of about $81,000 per year, but some can pull in over $200,000 annually with large amounts of overtime.

Monday evening, the alliance said it had increased its offer to 50% raises over six years, and it pledged to keep limits on automation in place from the old contract. The alliance also said its offer tripled employer contributions to retirement plans and strengthened health care options.

The union wants a complete ban on automation. It wasn’t clear just how far apart both sides are.

In a statement early Tuesday, the union said it rejected the alliance's latest proposal because it “fell far short of what ILA rank-and-file members are demanding in wages and protections against automation.” The two sides had not held formal negotiations since June.

Supply chain experts say consumers won’t see an immediate impact from the strike because most retailers stocked up on goods, moving ahead shipments of holiday gift items.

But if it goes more than a few weeks, a work stoppage could lead to higher prices and delays in goods reaching households and businesses.

If drawn out, the strike will force businesses to pay shippers for delays and cause some goods to arrive late for peak holiday shopping season — potentially impacting delivery of anything from toys and artificial Christmas trees to cars, coffee and fruit.

The strike will likely have an almost immediate impact on supplies of perishable imports like bananas, for example. The ports affected by the strike handle 3.8 million metric tons of bananas each year, or 75% of the nation’s supply, according to the American Farm Bureau Federation.

It also could snarl exports from East Coast ports and create traffic jams at ports on the West Coast, where workers are represented by a different union. Railroads say they can ramp up to carry more freight from the West Coast, but analysts say they can’t move enough to make up for the closed Eastern ports.

J.P. Morgan estimated that a strike that shuts down East and Gulf coast ports could cost the economy $3.8 billion to $4.5 billion per day, with some of that recovered over time after normal operations resume.

Retailers, auto parts suppliers and produce importers had hoped for a settlement or that President Joe Biden would intervene and end the strike using the Taft-Hartley Act, which allows him to seek an 80-day cooling off period.

But during a Sunday exchange with reporters, Biden, who has worked to court union votes for Democrats, said “no” when asked if he planned to intervene in the potential work stoppage.

In an update Tuesday morning, the White House maintained that administration officials were working “around the clock” to help negotiations move forward. Biden and Vice President Kamala Harris were also “closely monitoring” potential supply chain impacts, the White House added, enlisting a task force to meet daily and prepare for any disruptions.

Biden's keeping his word on not intervening carries a lot of weight for the coming election, experts say.

“Democrats really can't afford to alienate organized labor,” Bruncher said.

Taft-Harley injunctions by a president are “widely despised” by unions across the country, he said, and those same unions are necessary for turnout at the polls, particularly for Harris' campaign.

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Krisher reported from Detroit, Grantham-Philips from New York. Associated Press journalists Ben Finley in Norfolk, Virginia, Mae Anderson in New York, Dee-Ann Durbin in Detroit, Josh Boak in Washington, and Annie Mulligan in Houston contributed to this report.