This story has been all over the freight industry press for weeks, but has not yet hit the front pages of major US papers. Ryan Peterson of Flexport sounded the alarm last week about a looming labor dispute that could impact trade at American seaports.
The economic impact of a strike, according to Peterson, would be catastrophic:
In 2023, U.S. seaport trade totaled $2.12 trillion. If the ILA strikes, U.S. East and Gulf Coast ports—which handle 72% of that trade—would grind to a halt.
The ILA union has voted to prepare for a strike beginning October first, and the market does not believe this is an idle threat.
Potential Fallout
If the strike goes ahead it could be a major issue for Democrats: economic problems tend to hurt the incumbent party.
It would also put pressure on the Biden administration to halt the strike by invoking the Taft-Hartley Act, which could start a fight with organized labor. The surprise decision by the Teamsters, Democratic party stalwarts for generations, to not endorse Harris shows that there are already cracks in the alliance with organized labor.
And even if the strike is called off at the last minute, the threat itself is already having an impact on supply chains. Dominick Tullo of T&R Oil, a fuel supplier operating across several East Coast ports, told The Oracle:
I have no choice but to operate as if the strike will happen. Shipments are being shoehorned in and shippers are sending all their holiday stuff now, so the ports are very congested. The holiday rush is already happening. The December-February period is going to be a bloodbath.
