A potential strike at three dozen U.S. ports could upend supply chains and raise prices weeks before election day.
The International Longshoremen’s Association (ILA) says it will have 85,000 members walk off the job if the union doesn’t come to a new agreement with the U.S. Maritime Alliance, which represents carriers and marine terminal operators along the East and Gulf Coasts, before their contract ends on Monday, Sept. 30.
A coalition of 177 trade groups says those ports handle 41 percent of the country’s containerized port volume, and their closure would have a devastating impact on the U.S. economy.
Arlan Suderman, Chief Commodities Economist at StoneX, says in his daily email commentary, “This is something that the Biden Administration did not want to see happen just ahead of the U.S. presidential election. President Biden can call for a 60-day cooling off period, but he risks angering the union vote ahead of the election if he does so. However, not intervening could hit the economy hard right ahead of the election. In the end, the assumption is that he will call for a cooling off period soon after the strike starts.”
The contract covers all ports between Maine and Texas, including New York, Savannah, Houston, Miami, and New Orleans.
While bulk grain exports would largely be unaffected, the strike would impact containerized agricultural exports like soybeans, soybean meal, and other agricultural products exported via containers would be affected, forcing farmers to move shipments to new ports.
Source: NAFB News Service