Looming Port Strike Creates Shipping Snafu

Labor disputes are putting U.S. exports in a jam after failed negotiations could trigger a strike at major East Coast and Gulf ports. 

The rundown: Dockworkers represented by the International Longshoremen’s Association are poised to strike on Oct. 1 if a deal isn’t made with the United States Maritime Alliance, representing container companies. 

The union has been working to increase wages for workers and get assurance their jobs won’t be replaced by automation. The Alliance also filed a complaint against ILA, claiming the union had repeatedly refused to bargain.

Farmers to get pinched: The strike could impact 41% of U.S. containerized port volumes. For agriculture, that would mean disruption to meat and poultry exports, as well as eggs and other livestock products. Grain producers would also see some indirect impacts due to livestock exports being affected. 

That could mean reduced prices that producers receive for commodities due to lower export demand. Consumers could see higher prices for food and other agricultural imports. 

Shipping scramble begins: Ag Secretary Tom Vilsack urged both parties to come to a deal to avert a strike. He said the USDA would figure out ways to lessen the blow to agriculture if a strike occurs. Other top Biden administration officials met with the worker and shipping representatives to develop a potential resolution. 

In the meantime, companies have already begun rerouting some shipments to West Coast ports. 

Global grievances: Transportation issues are not isolated to the U.S. The potential strike comes amid a “perfect storm” of shipping issues that has rattled the global supply chain. That has made international shipping costs higher and created backlogs that have forced companies to reroute transportation.