What You Need To Know for October 3rd

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Port Strikes Could Stall The American Supply Chain: Eastern and Gulf coast ports are on strike following the calling of a stoppage from the International Longshoremen’s Association. Almost 50,000 dockworkers are involved in this strike - the first in nearly 50 years! This strike hurts transportation of food, autos, and energy products. The weekly impact of a strike would be ~$4.3B of lost imports & exports, and 100bps of GDP growth contribution.

The Maritime association proposed a 50% raise in wages, which was rejected by the Longshoremen who demanded a 77% raise over 6-years, plus commitments to stop all future automation. Longer term, the dock workers are worried about automation taking their jobs, which to be honest might be inevitable. There are worries that regardless of what number they set on, that these increased prices will drive higher product prices that are passed onto the consumer.

President Biden has the power to order a 80-day cooling off period to halt the stoppage, but has indicated he would led the Union negotiate at this time.

Western U.S. ports can take on some capacity over the short-term, but let’s hope a resolution is found.

Of course, this strike has given us a supply of The Wire x Port Strike memes…