US ports strike: Morgan Stanley outlines implications of extended work stoppage
2024.10.02 08:31
Investing.com — A strike by dockworkers stretching from the US East Coast all the way to the US Gulf Coast could dent economic activity and boost inflationary pressures if it carries on for an extended period of time, according to analysts at Morgan Stanley.
Ports in these regions handle a “meaningful” 30% share of American imports and exports, the analysts noted, adding that water is “the main channel” used to transport these goods.
As a result, a prolonged strike could disrupt local production and a reduction in exports, bump up the prices of items like food and beverages, and impact crucial US payrolls figures, the analysts said.
Shipments of everything from food to cars have been blocked on ports stretching from the state of Maine in the US Northeast to Texas in the country’s south since the dockworkers initiated the work stoppage earlier this week. Along with improved compensation, the workers are also asking for protections against automation.
The walkout comes after talks failed between the International Longshoremen’s Association (ILA), which represents around 45,000 of the dockworkers, and the United States Marine Alliance (USMX) employer organization. The ILA had been pushing for a revamped six-year contract to be agreed on before a deadline of midnight on Sept. 30.
However, the ILA refused the USMX’s final offer put forward on Monday, arguing that it did not meet the demands of its members.
The USMX had said it had proposed an almost 50% wage increase, an improvement from an earlier offer, and “strongly supports a collective bargaining process,” CNN reported. The group, which represents shipping firms and port authorities, also reportedly called for the ILA to clear a path for a return to the negotiating table.
But ILA leader Harold Daggett has said that the workers are “prepared to fight as long as necessary,” Reuters reported.
