Port Workers on Strike, Economy Could See $5B Hit Per Day

Port workers walked off the job Tuesday from Maine to Texas after the International Longshoremen’s Association union and the United States Maritime Alliance could not come to terms on a new agreement.

“45,000 port workers walked off of the job demanding a 77% pay raise over the next six years, as well as a halt to the automation process, which would eliminate some jobs,” says Arlan Suderman, Chief Commodities Economist at StoneX.

The strike will now back up the movement of consumer goods and containerized commodities. What will be the impact to agriculture?

“Most corn, soybeans and wheat, the major commodities, are shipped in bulk and are not impacted. This is primarily container shipments. There are some grain and oil seeds that are specialized, either identity preserved with certain traits or whatever that will be impacted significantly. If you like your morning coffee, a lot of our coffee shipments come in through these ports.”

Suderman says the bigger impact will be to the larger U.S. economy. Even a short strike is expected to have a big impact, costing as much as $5 billion per day.

President Biden can call for a 60-day cooling off period, but as Suderman noted in his daily email commentary days ago, he risks angering the union vote ahead of the election if he does so.

Biden released a statement confirming his support of the union Tuesday saying, “Collective bargaining is the best way for workers to get the pay and benefits they deserve. I have urged USMX, which represents a group of foreign-owned carriers, to come to the table and present a fair offer to the workers of the International Longshoremen’s Association that ensures they are paid appropriately in line with their invaluable contributions. Ocean carriers have made record profits since the pandemic and in some cases profits grew in excess of 800 percent compared to their profits prior to the pandemic. Executive compensation has grown in line with those profits and profits have been returned to shareholders at record rates. It’s only fair that workers, who put themselves at risk during the pandemic to keep ports open, see a meaningful increase in their wages as well.

As our nation climbs out of the aftermath of Hurricane Helene, dockworkers will play an essential role in getting communities the resources they need. 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 USMX to negotiate a fair contract with the longshoremen that reflects the substantial contribution they’ve been making to our economic comeback.”