Port strike update: What are the dockworker demands? Should I stock up on items? Here’s everything to know

As of midnight last night, dockworkers at East Coast and Gulf ports went on strike. The strike is their first nearly 50 years and its impact could be felt in everything from the economy to the presidential election to the upcoming holiday shopping season. Here’s what you need to know about the port workers’ strike.

What’s happening?

At midnight last night, the existing contracts for the 45,000 members of the International Longshoremen’s Association (ILA) expired. The ILA represents dockworkers who operate most of the major ports on America’s east coast and Gulf area.

As the Associated Press notes, the strike is affecting 36 ports and is the first strike by the ILA since 1977. As a result of the strike, imports of everything from automobiles to electronics to supply chain parts to food from overseas will not be able to be brought into the United States at the striking ports.

This means hundreds of thousands of cargo containers will remain unpacked at the ports or on cargo ships waiting off the East Coast and Gulf.

Ports along America’s west coast will continue to operate as normal as a different union represents their workers.

Why is this happening?

At the heart of the matter is a dispute over pay. As the dockworkers’ contracts were expiring, the International Longshoremen’s Association had been in negotiations with the United States Maritime Alliance (USMX), which represents the major shipping lines, to increase the pay of dockworkers to reflect both the rising cost of living and also the enormous profits that the companies represented by USMX have raked in in the past several years.

As CNN notes, those profits totaled over $400 billion from 2020 to 2023 alone.

The ILA reportedly opened the talks by asking for a 77% pay raise for its members over the six years the new contract would cover. The union said this amount was necessary due to inflation and years of insufficient pay raises. By Monday, USMX had counteroffered with a 50% pay raise over six years.

But the pay raise isn’t the only issue. The ILA wants a ban on all automation at docks, which it says could put some of its members out of work. However, the USMX only offered to keep the existing limits on automation that the old contract covered.

As a result of these discrepancies, the two sides were unable to come to an agreement before the previous contract expired, and thus the strike began just after midnight.

What do the port workers say?

The ILA issued a fiery statement ahead of the strike, saying, “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. 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.”

What does USMX say?

“In the last 24 hours, the USMX and ILA have traded counter offers related to wages,” the USMX said in a statement to Fast Company. “The USMX increased our offer and has also requested an extension of the current Master Contract, now that both sides have moved off their previous positions. We are hopeful that this could allow us to fully resume collective bargaining around the other outstanding issues – in an effort to reach an agreement. Our offer would increase wages by nearly 50 percent, triple employer contributions to employee retirement plans, strengthen our health care options, and retain the current language around automation and semi-automation.”

How will the strike affect U.S. companies?

That depends on how long the strike lasts. If it’s just a matter of days to a few weeks, major U.S. companies that rely on shipping through ports may not see too much disruption. That is because major importers like Walmart have been stocking up on inventory ahead of the deadline in the event that a deal would not be reached.

Will holiday shopping season be impacted?

The bigger the company, the more likely they are to have made inventory contingency plans to help get them through the upcoming holiday season. It should also be noted that goods can still be imported and exported from America’s west coast.

But the longer the strike goes on, the more likely it is to impact even large companies. And the strike will have a noticeable impact on the economy nearly immediately.

JPMorgan estimated that the strike may cost the U.S. economy between $3.8 billion to $4.5 billion a day. And that’s likely not just on lost sales from imported goods. The strike will also prevent U.S. companies from exporting their goods if those goods usually leave the country from the East Coast or Gulf ports.

Beyond the import and export of goods, the strike will also impact components that companies need for their supply chains in America, which could further hinder their ability to operate as normal.

How else will the strike affect my life?

If you like bananas, the strike may affect your life sooner than most. That’s because most bananas are imported through America’s East Coast ports. If they can’t be unloaded, they’ll rot and never make it to U.S. supermarkets. This may be why one of the first signs the average American sees of the strike in their life is the lack of bananas in store.

But the longer the strike carries on, the more likely Americans are to see shortages of certain foods and goods. It all just depends on how long the strike lasts.

What has the government said?

As you can imagine, a historic strike that shuts down most of the East Coast and Gulf ports just a little more than a month before a presidential election can throw a serious wrench in electoral affairs.

On one hand, the current administration doesn’t want a major strike impacting the U.S. economy right before voting day. However, on the other hand, it also doesn’t want to look like it’s siding with the billionaire business class over the ordinary everyday hardworking American dockworker.

But the Biden administration needed to pick a side—and it did. As CNN reports, on Monday, the U.S. Chamber of Commerce, which represents U.S. businesses, asked President Biden to exercise federal powers under the Taft-Hartley Act. The Act allows the U.S. government to order striking workers back to work.

When journalists asked Biden if he would exercise the Taft-Hartley powers, he replied, “No. Because it’s collective bargaining, and I don’t believe in Taft-Hartley.”

That statement was a clear sign that the Biden administration is firmly siding with American workers.

How long will the strike last?

There’s no way to tell. It could last days weeks or longer. It just all depends upon how soon the International Longshoremen’s Association union and the United States Maritime Alliance can agree on the terms of a new contract.

What items should I stock up on?

Well, if you like bananas, you might want to grab a bunch of them now. As for other goods, you are probably safe for at least a few weeks before supplies start to dwindle.

But also remember that goods can still come into the country via air and also from container ships on the West Coast. The issue, then, is just getting the goods distributed throughout the country after the dockworkers have unloaded the containers.