Looming Port Strikes Worrying News for Kamala Harris
The first national strike of maritime workers in nearly 50 years could be on the way, and it could bear consequences for Democratic nominee Kamala Harris in the run-up to the November presidential election.
A six-year master contract between the country’s largest union of maritime workers, the International Longshoreman’s Association (ILA), and the United States Maritime Alliance (USMX) will come to an end on September 30. If no deal is reached by then, strikes will begin the following day on October 1—little over a month before Americans head to the polls to elect the next president.
The dispute between the union and USMX has arisen over pay disputes and arguments over continued protections against automation in the industry. The ILA has accused USMX of an “ugly propaganda campaign” and said it had failed to prepare for negotiations that began two years ago.
“A sleeping giant is ready to roar on Tuesday, October 1, 2024, if a new Master Contract Agreement is not in place,” warned ILA President Harold J. Daggett in a statement on September 17. “My members have been preparing for over a year for that possibility of a strike.” The ILA represents approximately 45,000 port workers at 36 locations across the East and Gulf coasts.
Looming Port Strikes Worrying News for Kamala Harris
Photo Illustration by Newsweek/Getty Images
USMX said in a statement on September 23: “Despite additional attempts by USMX to engage with the ILA and resume bargaining, we have been unable to schedule a meeting to continue negotiations on a new master contract. We remain prepared to bargain at any time, but both sides must come to the table if we are going to reach a deal, and there is no indication that the ILA is interested in negotiating at this time.”
If a strike goes ahead, it could have a serious impact on goods coming into the U.S. at key ports right at the start of the holiday shopping season.
“The Department of Labor is already involved, but if a strike happens, and inflation starts climbing again, it won’t look good for Harris or the current administration,” Joseph Camberato, CEO at NationalBusinessCapital.com, told Newsweek. “People will be paying close attention to how this administration handles this situation, and it could definitely affect the election.”
Newsweek contacted Harris’s campaign team for comment via email outside of regular working hours.
Trouble for Harris?
Current vice president and Democratic nominee Harris could come under fire for the port strikes given that she is a member of the incumbent administration headed by Joe Biden. The White House has said it is monitoring the situation but will not intervene in negotiations, while retail leaders have urged action.
“We are monitoring and assessing potential ways to address impacts to U.S. supply chains related to operations at our ports, if necessary,” White House spokesperson Robyn Patterson said. “We continue to encourage the parties to continue negotiating towards an agreement that benefits all sides and prevents any disruption.”
But retailers are concerned. The Retail Industry Leaders Association (RILA) stressed the significance of the situation. “The importance of keeping these ports operational cannot be overstated, especially as the peak holiday season approaches,” it said in a statement. “A disruption in cargo movements would have profound consequences for retailers, manufacturers and consumers across the country.”
The high cost of living caused by rampant inflation which began at the tail-end of the coronavirus pandemic has been a key issue during this election campaign, with both Harris and her Republican opponent Donald Trump having promised to strengthen the economy. This is only likely to be further exacerbated as election day draws closer, Peter Follows, CEO of Carpedia, said.
“The strike could hold substantial political challenges for the election season. Economic disruptions and rising consumer prices could become focal points in political debates and voter concerns,” he told Newsweek. “The government’s response to the strike will be closely watched and could be compared to recent interventions like those in the Canadian railway strikes, where swift action was taken in an attempt to mitigate economic impact.”
While inflation has cooled since a peak of 9.1 percent in June 2022, down to 2.5 percent in August this year, it could be subject to rise in the coming months, particularly if any strike action is prolonged.
“The threat of a strike during the peak shipping season has many retailers already implementing costly mitigation strategies,” National Retail Federation CEO Matt Shay said. “At a time when inflation is on the downward trend, a strike or other disruption would significantly impact retailers, consumers and the economy. The administration needs to offer any and all support to get the parties back to the table to negotiate a new contract.”
An impending strike could be mitigated for a stretch by a sitting president invoking the Taft-Hartley Act. The act allows a president to intervene in labor disputes that threaten national security or safety by imposing an 80-day cooling-off period, which would force workers back on the job as negotiations proceed. However, the White House has confirmed there is no current intention of doing this.
Republicans have taken notice, criticizing federal officials for a “lack of engagement” in the negotiations between the warring parties.
“Given the devastating economic consequences of a potential strike and the administration’s lack of engagement to date, we urge you to give immediate attention to this matter, to aid in these negotiations, and find a reasonable resolution to these contract disputes,” House Republicans said in a letter. “If a strike should occur, we urge the administration to utilize every authority at its disposal to ensure the continuing flow of goods and avoid undue harm to American consumers and the nation’s economy.”
“In the event of continued deadlock, invoking the Taft-Hartley Act could provide a last-resort option,” Ram Ganeshan at Raymond A. Mason School of Business told Newsweek. “However, this is politically sensitive, especially given the current administration’s pro-labor stance, and the impending elections, and should be the ‘nuclear’ option if all other negotiations fail.”
The last time a president invoked the Taft-Hartley Act was in 2002 by President George W. Bush, during the West Coast port lockout.
Consumer Impact
CEO of the retail industry’s largest trade body, the National Retail Federation (NRF), has already called for the parties to reach a settlement—and fast, given the wide-ranging consequences a strike could have in the run-up to the busiest shopping period of the year.
Experts warned that few goods will be exempt from the potential trouble, which is likely to mean higher prices due to lower availability.
“Goods with high price elasticity, including luxury goods, consumer tech products, automobiles and apparel—largely imported from Asia and Europe—could see price increases,” Jason Fisk, CEO of SalSon Logistics, told Newsweek, given that these categories have historically been most affected in similar situations, such as during the COVID-19 disruptions.
He also said that consumer electronics, vehicles and perishable items, including fruits, vegetables and seafood could possibly “experience quicker impacts due to the complexity and cost of finding alternative supply routes.”
A short-term strike is likely to have a “ripple effect,” Mike Ferris, President at Strader-Ferris International, told Newsweek, particularly in the event that the ILA and USMX continue in disagreement for several weeks or more.
“Disruptions at these major ports would create immediate ripple effects across the supply chain. Retailers are already preparing by rerouting shipments, but there’s only so much they can do to avoid delays,” he said.
“The longer the strike goes on, the more difficult it will be for businesses to keep these costs from passing on to consumers. In terms of how quickly prices could rise, the effects may not be immediate on all food items. Some things might take a bit more time to reflect the increased costs from delayed shipments and rerouting fees.”
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