Morgan Stanley outlines the implications of Investing.com’s extended business interruption

Investing.com — A strike by dock workers stretching from the US East Coast to the US Gulf Coast could hurt economic activity and fuel inflationary pressures if it continues for a long period of time, according to analysts at Morgan Stanley.

Ports in these regions handle a “significant” 30 percent share of US imports and exports, the analysts noted, adding that water is the “primary channel” used to transport these goods.

As a result, a prolonged strike could disrupt local manufacturing and cut exports, raise prices for products such as food and beverages and hurt key U.S. payrolls numbers, analysts said.

Shipments of everything from food to cars have been blocked at ports stretching from the northeastern US state of Maine to Texas in the south of the country since port workers initiated a work stoppage earlier this week. In addition to improved compensation, workers are also demanding protection from automation.

The walkout comes after talks broke down between the International Longshoremen’s Association (ILA), which represents about 45,000 dockworkers, and employers’ organization the United States Marine Alliance (USMX). The ILA had been pushing for a revamped six-year contract to be agreed before the midnight deadline on September 30.

However, the ILA rejected USMX’s final offer presented on Monday, arguing that it did not meet the demands of its members.

USMX said it proposed a nearly 50 percent pay increase, an improvement over a previous offer, and “strongly supports a collective bargaining process,” CNN reported. The group, which represents shipping firms and port authorities, also called on the ILA to clear the way for a return to the negotiating table.

But ILA leader Harold Daggett said workers were “prepared to fight as long as necessary,” Reuters reported.