More than 40,000 International Longshoremen's Association (ILA) members went on strike Tuesday. The union rejected a a wage hike offer of nearly 50% over six years on Monday. This is the first work stoppage at East and Gulf ports since 1977.
"The ocean carriers represented by USMX want to enjoy rich billion-dollar profits that they are making in 2024, while they offer ILA Longshore Workers an unacceptable wage package that we reject," the ILA said in a statement. "ILA longshore workers deserve to be compensated for the important work they do keeping American commerce moving and growing. It's disgraceful that most of these foreign-owned shipping companies are engaged in a 'Make and Take' operation: They want to make their billion-dollar profits at United States ports, and off the backs of American ILA longshore workers, and take those earnings out of this country and into the pockets of foreign conglomerates. Meanwhile, ILA dedicated longshore workers continue to be crippled by inflation due to USMX's unfair wage packages."
[RELATED: Clock ticking down on potential East Coast port strike]
The USMX website was down as of press time on Oct. 1. A statement from Sept. 30 said both sides traded offers and counteroffers, but could not come to an agreement.
CBS News reports 14 ports are closed: Baltimore; Boston; Charleston, South Carolina; Jacksonville, Florida; Miami; Houston; Mobile, Alabama; New Orleans; New York/New Jersey; Norfolk, Virginia; Philadelphia; Savannah, Georgia; Tampa; and Wilmington, Delaware.
"Our hope is for a speedy resolution that allows The Port of Virginia to implement its resumption of operations plan to methodically and safely bring terminals back online," the Norfolk, Virginia, port said in a statement. "At this time, it is unclear how long this work stoppage will last."
The National Association of Wholesaler-Distributors (NAW) said the damage from a strike could reach $5 billion per day.
"The East and Gulf Coast port strike is putting our economy and national security at risk. This strike isn't just about disrupting a few shipments; it's about stopping the supply chain and bringing the flow of critical goods to a standstill," Eric Hoplin, CEO of the NAW said it a statement.
The National Association of Manufacturers said more than 68% of all containerized exports and more than 56% of containerized imports flow through East and Gulf Coast ports, representing an average daily trade value of more than $2.1 billion. That includes more than 76% of containerized vehicle exports and more than 54% of containerized vehicle imports.
"New York has been working around the clock to ensure that our grocery stores and medical facilities have the essential products they need," New York Gov. Kathy Hochul said. "It's critical for USMX and the ILA to reach a fair agreement soon that respects workers and ensures a flow of commerce through our ports."
American Trucking Associations President and CEO Chris Spear called it a "cliff's edge."
"You are going to see the severity of it in week one, starting with agriculture," Spear told NewsNation. "Forty-six percent of everything in agriculture is exported through these East Coast ports. So farmers, those perishables from produce but also meat, poultry, soybeans, cotton. This is very significant for our farming community, but also, 85% of canned goods go through the East Coast ports. So you're talking about half of North Carolina under water or mud and four other states directly impacted and trying to recover from a natural disaster. This is not the time for a strike."
[RELATED: Port strike creates 'opportunities' for spot market carriers]
Jason Miller, Eli Broad endowed professor of supply chain management at Michigan State University and interim chair of the Department of Supply Chain Management, says the strike, combined with plant closures brought on by Hurricane Helene are starting October out with weaker freight volumes.
"If the port strike sees a quick resolution (e.g., less than a week), disruptions will be relatively limited. In contrast, if the strike exceeds two weeks, we will being seeing more systematic knock-on effects," Miller says. "Hopefully both sides can come to a quick resolution amenable to both parties."
The White House has said it wouldn't interfere in the strike.
"As our nation climbs out of the aftermath of Hurricane Helene, dockworkers will play an essential role in getting communities the resources they need," President Joe Biden said. "Now is not the time for ocean carriers to refuse to negotiate a fair wage for these essential workers while raking in record profits. My administration will be monitoring for any price gouging activity that benefits foreign ocean carriers, including those on the USMX board. It is time for the USMX to negotiate a fair contract with the longshoremen that reflects the substantial contribution they've been making to our economic comeback."
