Quick rundown: Robots, "corporate bastards," and alcohol imports
1. Who is on strike?
45,000 members of the International Longshoreman’s Association (ILA) went on strike earlier this week after a new contract couldn't be reached with shipping companies. The ILA handles container shipments in ports ranging from Boston to Houston.
2. Labor: Don't automate our jobs
"As everyone has heard by now my Boss is taking a hard stand on the never ending threat of automation that is infiltrating our industry, and I have heard the remarks from those that say we need to learn how to deal with it! Well I have a message for those people 'kiss my fat A$$'!"
"...Sam’s, Home Depot, Lowe’s, Walmart and many and many more have continually sold the general public on the premises that by going with automation it will save the public money, with the FACT being thousands of good tax paying jobs went away and the CEO’s and CORPORATE EXECUTIVES are getting rewarded and richer by getting raises and bonuses for making record breaking profits while your dads, moms, brothers and sisters are pushed out of work, not to mention the same retailers that sold “you the general public” on the idea that it will save you money has actually gone up on the price of groceries and supplies of all kinds!"
"So don’t be so quick to judgment on us the longshoremen of this country for fighting for our jobs because who knows when it will be your turn next!! We are fighting for our rights to make a honest living not to allow a robot to wipe us out so that them corporate bastards can buy another vacation island somewhere!!!!"
"Big Jack" Pennington, President of ILA Local 24 in NJ (9/30/24)
3. Shipping companies: What else do you want?
"Our offer would increase wages by nearly 50 percent, triple employer contributions to employee retirement plans, strengthen our health care options, and retain the current language around automation and semi-automation.”
4. Trade Implications
East Coast and Gulf ports accounted for 60% of container shipping as of 2022, but as this contract dispute has come into view, port users have redirected shipping to West Coast ports, which now handle nearly 50%. Expect price increases.
5. Commodity price implications
Most commodities seem relatively balanced between East and West Coast shipping but East Coast ports handle 260% more alcoholic beverages, 160% more wood, and 175% more fruits/nuts.
6. Estimating the effects
"A week’s strike may lead to 4-5% of global capacity being disrupted through knock-on effects." JP Morgan Analyst
7. Strike busting?
President Biden is the self-proclaimed most pro-union U.S. President. The administration has stated they have no intention of invoking Taft-Hartley to break a strike, but a strike lasting longer than a week would likely turn up the heat on all sides.
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How long will this last?
A) < 1 week
B) < 1 month
C) Longer than 1 month
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