One of the key pieces of the global economy and international supply chain is the system of ports that facilitates international commerce. Without a well-oiled machine to keep commerce flowing and needed goods arriving where they should, the deeply interconnected world supply chain will fall apart.
Well, striking workers on the West Coast look poised to do their best to make that happen: 22,000 workers at 29 ports are potentially readying themselves to strike as soon as the end of this June. ZeroHedge, reporting on that eventuality, notes:
West Coast union dockworkers may strike if they don’t come to an agreement to replace their existing contract with marine terminals. The contract is set to expire at the end of June.
[…]The International Longshore and Warehouse Union, which represents nearly 22,000 workers at 29 ports along the West Coast, recently put together its contract negotiating team. Nearly three-quarters of those workers are employed at the ports of Long Beach and Los Angeles, the major nexus for goods shipped from Asia to North America.
The union, according to the statement put together about the negotiating team, has a wide array of goals. In its words:
The resolutions for the upcoming contract generally revolved around five issues: safety, wages, benefits, jurisdiction, and technology. Reports from Committees covering benefits, technology, legislative, and provided delegates with further details and analysis to inform the debate about the resolutions.
Further, it’s not looking like the union has any intention of backing down; it’s united and ready to try and get the “best contract possible,” as the same statement notes, quoting the president of the union and saying:
President Adams said that the caucus showed the ILWU was unified. “We are a democratic union, and I wouldn’t have it any other way. The membership gave us the direction for negotiations and we are ready to go get the best possible agreement,” Adams said. “We’re coming out of this caucus as strong as we’ve ever been. We are moving forward and moving in the same direction.”
Perhaps the union and ports will reach an agreement. The message promulgated in that statement is one of unity and strength, but not necessarily hostility. Still, there have been times in the past where negotiations didn’t work out and a strike resulted. The result was chaos and economic devastation, as US News reported. In its words:
This week marks a year since a resolution was announced that effectively cleared up America’s monthslong West Coast dockworker slowdown – which at times ground the country’s Pacific ports to a near standstill.
And 12 months later, analysts have only scratched the surface of just how much the dispute dragged down U.S. economic growth.
[…]The slowdown’s final economic price tag was first described as a “transitory” or “one-time” drag on U.S. economic growth. America’s gross domestic product in the first three months of the 2015 ticked up a meager 0.6 percent, as the value of U.S. exports dropped by more than $11 billion (nearly 6 percent) between May 2014 and February 2015.
But the country’s hangover from the slowdown has hardly been short-lived. American companies that were unable to ship their products in a timely manner began accumulating more and more extra supplies and products. This inventory glut crowded warehouses, eventually forcing companies to cut back on their new orders to clear out their backed-up storage facilities.
This dynamic inherently reduces new orders of goods, which hurts U.S. manufacturers and suppliers and ultimately restricts domestic economic growth. Brad McMillan, a senior vice president and chief investment officer at Commonwealth Financial Network, estimated earlier this year that the ongoing inventory correction slashed about 0.5 percentage points from America’s weak fourth-quarter GDP number.
In an already troubled economy, that could be a major, major problem. With an economy walloped by Covid and the supply chain issues stemming from it, a massive strike that shuts down the already overburdened West Coast ports could throw the economy into chaos.