Container ships are lining up along the ports of the U.S. East Coast and the Gulf of Mexico as dockworkers' strikes have entered their third day, causing disruptions in unloading and potentially leading to shortages of goods. Economists have indicated that the initial phase of the strike will not lead to increased consumer prices, as businesses have accelerated the shipment of critical goods in recent months. However, economists at Morgan Stanley believe that a prolonged work stoppage will eventually permeate into prices, with food prices likely to react first. Although no negotiations have been scheduled yet between the International Longshoremen's Association and employers, port owners have expressed a willingness to engage in new negotiations under pressure from the White House.
The United States' major ports are facing the largest dockworkers' strike in nearly half a century, which has left at least 45 container ships unable to unload, a number that was only three before the strike began. As the strike enters its third day, the backlog of ships is expected to double by the weekend, and the resulting congestion may take weeks or even months to clear.
Economists point out that while the initial closure of ports will not drive up consumer prices, a long-term shutdown will eventually affect prices, especially food prices. Sean Connolly, CEO of packaged food manufacturer Conagra, stated on Wednesday that the company had purchased raw materials in advance and had been working with suppliers for months to prepare for the strike. "If the issue drags on, it will be a much bigger problem for everyone," he said.
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Data from Everstream Analytics shows that before the strike, only three ships were waiting, but now at least 45 ships are anchored outside the ports. Jena Santoro from Everstream stated that many are choosing to wait, hoping the strike will be resolved quickly, rather than diverting their cargo.
The current alternative is to navigate through the Panama Canal to West Coast ports, but this would add thousands of miles to the journey and several weeks to delivery times, as well as significantly increased costs.
It is understood that this strike, initiated by the International Labor Organization, involves 45,000 port workers from Maine to Texas who are seeking substantial pay raises and wish to halt port automation projects that could lead to job losses. Although the U.S. Maritime Alliance (USMX) had offered a 50% pay increase, the International Longshoremen's Association (ILA) believes this is insufficient to address their concerns.
The strike has already affected 36 ports, including New York, Baltimore, and Houston, which handle a variety of containerized cargo.
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