The US port strike could trigger a new wave of inflation

More than 45,000 International Longshoremen’s Association (ILA) members at more than three dozen facilities in 14 Gulf and East Coast ports went on strike Tuesday morning, marking the largest labor action at U.S. ports in nearly 50 years. The industrial action, driven by disputes over automation and wages in a new multi-year labor contract, threatens to disrupt supply chains nationwide. If the strike continues for more than a week, retailers may face shortages of certain goods (read: Here), could trigger another wave of inflation.

The ILA strike hit 36 ​​ports in the Gulf and up and down the East Coast — the union’s first industrial action since 1977. Workers walked off the job at the Port of Philadelphia a few minutes after midnight, when the ILA and the US Maritime Alliance (USMX)—a coalition of port operators and carriers—failed to agree on a new labor contract offer that would have increased wages by 50 percent over six years and engaged to impose limitations on port automation. The union demanded a 77% wage increase.

On Tuesday, the ILA said USMX’s latest offer was rejected because it “fell well below what senior ILA members are demanding in terms of wages and protections against automation.” Both sides have been deadlocked in talks since June.

“We are prepared to fight as long as necessary, to remain on strike for however long it takes, to get the wages and protection against automation that our ILA members deserve,” union president Harold Daggett said in a statement , quoted by AP Newsadding: “They must now meet our demands for this strike to end.”

Supply chain management company Flexport founder and CEO Ryan Petersen noted on X that the Teamsters Union has released a statement of solidarity with the ILA, telling the Biden administration to “stay the hell out of this fight”…

Ahead of the strike, a video posted on X, purportedly by ILA boss Daggett, warned: “I’m going to cripple you and you have no idea what that means. No one does,” referring to the power the union has over the U.S. economy.

“This video is wild If this video is real I think we need to give the seafarer exactly what he wants immediately… then we need to execute a plan to automate as many ports as possible so they can’t destroy civilization. – as he threatens to do!” All-In podcast host Jason Calacanis wrote on X while commenting on the video.

Goldman analysts explained last week that a walkout of ILA members would occur endangers $5 billion in international trade daily entering Gulf and East Coast ports, while JPMorgan noted the hit could be between $3.8 billion and $4.5 billion a day.

On Monday morning, Goldman analysts led by Brooke Roach gave clients a overview of major retailers which would be most affected by a port closure. In particular, analysts found that about half of Dollar Tree’s products had passed through these ports, indicating that a prolonged strike could cause shortages. certain goods on store shelves.

Source: Goldman Sachs

Also on Monday, Suzanne Clark, CEO of the US Chamber of Commerce, wrote in a letter to the Biden administration: “It would be unthinkable to allow a contract dispute to cause such a shock to our economy,” adding: “Taft- Hartley. it would give time to both parties in negotiations to reach an agreement on a new employment contract.”

By Zerohedge.com

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