October 1, 2024
A massive dockworker strike at seaports on the U.S. East and Gulf coasts is expected to wreak havoc on global supply chains and the economy—with American consumers likely to notice shortages of popular products, if the work stoppage lasts for a long time, reports NBC News.
Workers at ports stretching from Maine to Texas went on strike early on Tuesday, October 1, in a dispute over wages and automation. The action, which is likely to have severe consequences on ships carrying billions of dollars of cargo, is the first by the International Longshoremen’s Association (ILA) union in nearly half a century.
The ILA made good on its threat to strike at 14 major ports after talks broke down with the United States Maritime Alliance (USMX) employer group ahead of a September 30 deadline.
“The top line takeaway here is duration amplifies impact,” Lisa DeNight, managing director of National Industrial Research at Newmark, told CNBC’s “The Exchange” on Monday.
“If this strike goes on for a couple of days the implications are, well, rather short-lived, I’d say. If this drags on, it has cascading impacts throughout the global economy—not just the U.S. economy. So, the unpredictability of this issue here is really in play and it has the magnitude to really throw a giant wrench in global supply chains,” she added.
DeNight said that even a minor disruption of just a couple of days could have “really significant implications for certain industries,” including pharmaceuticals, auto and manufacturing.
Ocean supply chains have already been hit hard this year by conflict in the Red Sea, a lengthy drought affecting the Panama Canal, and the Baltimore bridge collapse.
Even so, Peter Sand, chief analyst at ocean freight rate intelligence platform Xeneta, has said that—given that more than 40% of total “containerized goods” enter the U.S. via ports on the East and Gulf Coast—“the stakes could not be higher.”
Indeed, Danish shipping giant Maersk has warned that just a one-week shutdown could take four to six weeks to recover from, “with significant backlogs and delays compounding with each passing day.”
In an update published on Monday, Maersk said the disruption would likely lead to delays in cargo movement, increased costs, and logistical challenges for firms relying on U.S. East Coast and Gulf ports. A lengthy labor dispute, the firm added, may exacerbate these disruptions.
Research contact: @NBCNews
