Strike closes US ports

Gantry cranes went silent from New England to Texas on Oct. 1 when the International Longshoremen’s Association—the union representing dockworkers on the US East and Gulf Coasts—walked out on strike for higher pay and to slow automation at ports. The strike threatens a repeat of the supply chain disruptions that choked the US economy 2 years ago and may hamper the chemical industry, which depends on trade for access to end markets and raw materials.

The Conference Board, an economic think tank, says the strike halted activity at 36 ports that handle 57% of US shipping container volume and a quarter—roughly $3 trillion per year—of US trade. It estimates that the strike will cost the US economy $540 million per day.

“A port strike would paralyze US trade and raise prices at a time when consumers and businesses are starting to feel relief from inflation,” Erin McLaughlin, the Conference Board’s senior economist, says in a statement. “There’s no easy Plan B. While shippers have already begun diverting some cargo to the West Coast, capacity for such alternative options are limited.”

According to the American Chemistry Council (ACC), a trade group representing US chemical makers, the ports being struck account for 90% of waterborne chemical imports and exports and handled more than $100 billion in chemical shipments in 2022. The ACC says 138 million metric tons (t) of chemical trade went through Gulf Coast ports in 2022; 31 million t went through East Coast ports.

“Shutting down the ports along the East and Gulf Coasts will result in a major disruption of chemical imports and exports, which in turn will hurt the broader economy both here and abroad,” ACC CEO Chris Jahn says in a press release. “We urge the White House to do everything possible to prevent this major shockwave from rippling through the American supply chain and hurting U.S. trade by working with both parties to resume contract negotiations.”

The Society of Chemical Manufacturers and Affiliates (SOCMA), a trade group that represents US specialty chemical manufacturers, says it will participate in a virtual roundtable this week with US Department of Commerce officials to discuss the strike’s impact on the specialty chemical sector and industries that depend on it.

“Without our specialized chemicals, production across various industries could come to a standstill,” SOCMA president Jennifer Abril says in a statement.

Trade groups such as the National Association of Manufacturers and the US Chamber of Commerce have called on the Joe Biden administration to invoke the Taft-Hartley Act and order the dock workers back to work for an 80-day cooling-off period, a step the administration has so far refused to take. The Conference Board points out that the act has been used only once since the 1970s, for a 2002 lockout on the West Coast.