Published
September 25, 2024
A threatened U.S. dock workers strike would reduce global shipping capacity from a market already short of such supply, causing price spikes, delays and turmoil ahead of the 2024 holiday season, according to Lars Jensen, CEO of consultancy Vespucci Maritime, speaking to an exclusive audience of Chamber members.
The International Longshoremen’s Association – a union covering dozens of container ports and other facilities along the Atlantic and Gulf coasts, major rivers and the Great Lakes region – is threatening to strike starting Oct. 1. The union seeks concessions on a range of issues from double digit wage increases to restrictions on automation.
“The industry is not poised to handle this very well,” Jensen said during the Sept. 12 inaugural edition of The Call, a new morning video update for members offered as part of the Chamber’s Global Intelligence Desk.
The Call is created for the Chamber’s membership by the Global Intelligence Desk. For more information, please email: globalintel@uschamber.com
For more on the Chamber’s logistics and supply chain practice: jdrake@uschamber.com
The threat of a strike comes amid significant challenges to shipping lines around the world that have already raised operating costs for many businesses. Among the disruptions are surging demand along certain routes, dockside congestion, and attacks on the Red Sea by Houthi militants, forcing costly rerouting along alternative sea-lanes.
“The disruptions in the Red Sea that has forced many shipping lines to take a detour around Africa has soaked up every available ship that is out there,” said Jensen.
A strike in the US would “remove capacity from a market where zero capacity is available,” Jensen said. The upshot? The potential for significantly higher shipping costs, a risk particularly for businesses operating on margins too small to absorb such shocks.
Also joining The Call was the Chamber’s John Drake, Vice President of Transportation, Infrastructure and Supply Chain policy.
The ripple effects of a strike would be considerable: delays in deliveries of consumer goods, lost sales for importers and exporters, disruptions of raw material deliveries for supply chains, and possible price increases across broad swaths of the economy.
A strike would mean at least 45,000 members of the ILA – staffing ports from Maine to Texas – would stop working until a deal is reached. West coast ports, covered by a different union, would not be included in the strike.
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About the authors
Jay Sapsford
Jay Sapsford is Senior Vice President for Global Risk Analysis and helps lead the Chamber’s efforts in assessing geopolitical and economic risks that impact the business community. He plays a key role in identifying global trends, risks, and opportunities on behalf of the Chamber’s membership.
