Did the ports go on strike? Port of Houston among impacted ports from Texas to Maine

Tens of thousands of dockworkers officially went on strike early Tuesday morning, after the clock struck midnight and the calendar flipped to October. Employees at docks from Texas to Maine walked out with no new labor deal in hand.

Thirty-six East and Gulf Coast ports shut down as 45,000 union workers walked off the job after labor negotiations stalled between the International Longshoremen's Association (ILA) and the United States Maritime Alliance (USMX). The strike only exacerbates some temporary port closures in places like Florida, the Carolinas and Georgia in the wake of Hurricane Helene.

The ILA strike is the first at these ports since 1977 and has the potential to cost the economy up to $5 billion a day, upend holiday shopping for millions of Americans and dictate whether many small- and medium-sized businesses and farmers turn a profit or lose money this year, experts said.

“Every idle day that a ship does not get into the port costs money and sometimes a lot of money…that ultimately gets passed onto consumers,” said Stamatis Tsantanis, chairman and chief executive of shipper Seanergy Maritime and United Maritime, in a statement.

People are also reading: Port workers strike could snarl the supply chain and bust your holiday budget

Why did the port workers go on strike? See their demands

Dockworkers are seeking a new labor contract focused on wages and automation. The two key jobs of dockworkers, according to the Washington Post, are operating cranes and moving shipping containers. Due to advances in automation, both tasks can now be done without humans.

Another group striking at the Port of Philadelphia included a message board on the side of a truck, courtesy of a union. The Associated Press reports the board read, "Automation Hurts Families: ILA Stands For Job Protection."

The ILA had an opening offer of a 77% pay raise over the next six years of the new contract. President Harold Daggett says this raise would balance out inflation and years of small raises. ILA members currently have a base salary of $81,000, but large amounts of overtime can allow some to reach $200,000, according to the Associated Press.

As of Monday evening, USMX, the group representing the ports, had offered 50% pay raises for the new contract and promised to limit automation rather than the complete ban dockworkers are demanding. The union responded Tuesday morning by rejecting the offer, saying it "fell far short of what ILA rank-and-file members are demanding in wages and protections against automation."

Port strike could cost $5 billion each day

Now that the strike is on, experts will turn their focus to how long the strike may last. Each day of the strike could cost the economy up to $5 billion a day as imports and exports are blocked, some economists estimated.

“It’s not just about the shutdown but also, about the recovery period and how long it takes to get things up back and running,” said Jonathan Gold, vice president of supply chain and customs policy at the Nation Retail Federation.

For each day of the strike, it takes about three to five days to clear the backlog and resume normal operations, he said. “The longer it goes, the more it gets compounded,” he said.

What will be affected by the port strike?

Imports

With about half of U.S. ocean imports passing through the East and Gulf Coast ports, a wide range of products are affected, including produce, cars, auto and machinery parts, clothing, pharmaceuticals, wine and spirits, holiday goods like toys, and seafood, experts said.

“Any strike that lasts more than one week could cause goods shortages for the holidays,” said Eric Clark, portfolio manager of the Rational Dynamic Brands Fund. “Retailers are running lean currently so inventory would get drawn down, and prices of shipping, and goods prices would go vertical for a period of time. We could get the kind of inflation for 6 months similar to or worse than peak inflation levels a year ago.”

Small and medium-sized businesses could suffer the most, some said.

“Large businesses with dedicated procurement departments and considerable access to capital have been preparing for this strike for some time and many have ordered excess materials which they were able to finance with lower-cost debt,” said Ben Johnston, chief operating officer at small business lender Kapitus.

“Small businesses, however, are less likely to have been able to order early and in bulk and are less likely to obtain the capital required to order larger quantities of supplies in advance,” he said.

Exports

Businesses that sell products to international markets would suffer, experts said. For example, agricultural exporters of soybeans and poultry won’t be able to send their goods overseas and could end up losing market share, or worse, lose money because their goods are perishable, they said.

Jobs

Companies keeping lean inventories to keep costs low might have to shut down assembly lines amid a prolonged strike, for example, Gold said. This would come at a time when the job market is already cooling.

Port of Houston shut down due to strike

Dockworkers are striking at the Port of Houston, one of the world's largest ports and the busiest along the Gulf Coast. Prior to the midnight deadline, at least 50 employees met outside the port with signs reading, "No Work Without a Fair Contract," San Antonio Express-News reports.

The strike has forced the port to shut down.

USA TODAY reporter Medora Lee contributed to this report.

This article originally appeared on Austin American-Statesman: Port strike 2024: Texas dockworkers demand fair wages, automation ban