Shipping along America’s eastern seaboard from Maine to the Gulf of Mexico has been shutdown as a strike by 45,000 dockworkers begins.
Union members of the International Longshoremen’s Association (ILA) walked off the job at midnight on Oct 1, shutting down 14 major ports on the U.S. East Coast and stranding billions of dollars worth of trade.
The strike comes after the union and United States Maritime Alliance (USMX) ownership group failed to reach a new collective agreement due to a dispute over wage increases.
The strike is expected to cost the U.S. economy as much as $5 billion U.S. a day and hurt companies ranging from Walmart (WMT) to General Motors (GM).
The Maritime Alliance reportedly offered a 50% pay raise over six years, but that offer was rejected by the union. It’s not clear when collective bargaining between the two sides will resume.
Major ports that are now shutdown in the U.S. include Boston, New York, Philadelphia, Baltimore, Miami, and New Orleans, among others.
It’s the first large-scale eastern dockworker strike since 1977.
The 14 ports along the U.S. East Coast collectively handle $3 trillion U.S. in international trade a year, according to the Conference Board.
Analysts say the sectors that are most vulnerable to the port strike are the fresh food and automobile industries.
Cruise ship operations and military shipments are not impacted by the port strike, according to the United States Maritime Alliance.
