Before the strike, government officials reached an agreement with the employers’ group, the United States Maritime Alliance (USMX) and the International Longshoremen’s Association (ILA). The government has repeatedly ruled out using federal powers to end the strike in case of failure.

The President of the United States has the right to call off certain strikes. The ILA union, which represents 45,000 longshoremen, negotiated a new six-year contract with USMX. After the deadline passed at midnight on September 30, industrial action began.

The White House puts pressure on employers

“I have called on the USMX, which represents a group of foreign-owned shipping companies, to come to the bargaining table and make a fair offer to the workers of the International Longshoremen’s Association. President Joe Biden.

White House spokeswoman Karine Jean-Pierre also noted that demand for cruise services is increasing after the coronavirus pandemic. “Shipping companies have achieved record profits since the pandemic, in some cases increasing profits by more than 800 percent.” Labor Minister Julie Su said “employers have refused to submit an offer that reflects workers’ sacrifice and contribution to their employers’ profits.” The parties must return to the negotiating table.

Controversy over automation

ILA President Harold Daggett said employers such as container ship operator Maersk and its subsidiary APM Terminals North America have not offered enough wage increases or accepted calls to end port automation projects. “We are prepared to fight as long as necessary and to strike as long as necessary to get the wages and protection our ILA members deserve,” Daggett said Tuesday.

“USMX is now responsible for this strike. She must now meet our demands to end this strike.

“Tragedy” for the auto industry

The labor dispute has so far paralyzed half of the country’s maritime transport. JP Morgan analysts estimate the strike could cost the US economy about $5 billion (4.5 billion euros) a day. The flow of all goods, from food to clothing to car transport, has been banned.

John Bocella, president of the Alliance for Automotive Innovation, said the ports affected by the strike handled 34 percent of $135.7 billion worth of motor vehicles and parts last year. “If the strike goes on for weeks, it will be a tragedy,” said Steve Hughes, president of HCS International, a firm that advises the auto industry on shipping issues.

European companies are particularly affected

European car companies have been hit hard, said Barclays analyst Don Levy. “European automakers rely heavily on Southeast ports like Baltimore and Charleston for imports because most of their U.S. production takes place in the region, and they are closely monitoring the situation and working to minimize impacts.” .

Volvo Cars said it is making emergency plans. A shortage of spare parts may force some automakers to cut production. Meanwhile, some carmakers like Stellandis have secretly welcomed it if analysts give their high order books.

Handel tried to prepare

But the industrial action, the ILA’s first since 1977, is causing concern for companies across the economy that rely on shipping to export and import their goods. Retailers, which account for about half of total container shipping volume, are busy implementing backup plans as they prepare for the critical winter season.

Many major players brought Halloween and Christmas items into the country early to avoid strike-related disruptions. However, this results in additional costs for shipping and storage. Retail giant Walmart and department store chain Costco said they were doing everything they could to minimize the impact.