on Tuesday, thousands of members of the International Longshoremen’s Union went on strikeensuring the import and export of goods at ports along the East Coast to the Persian Gulf. ILA is currently negotiating up-to-date contracts with the US Maritime Alliance, demanding higher wages commensurate with record profits and protection against automation. The potential impact of the strike was enormous, costing as much as $5 billion per day.
Already, coffee traders in America were feeling the pressure, with hundreds of containers stuck in limbo in the port. But last night, in the early hours of the morning, an agreement was reached that ended the strike and avoided an economic crisis. At least for now.
According to Reuters, the initial agreements provide for a 62% boost in dockworkers’ wages over six years. Union representatives called for an immediate end to the strike by January 15, which will give both sides more time to negotiate outstanding issues in the contract.
The strike was compact, only three days in total, but it showed how critical the role of these workers in the economy was. The impact on the coffee industry in this petite window succinctly demonstrates this fact.
Coffee supplies in the United States have already hit an “all-time low,” and this problem has only been exacerbated by the strike. Without up-to-date containers arriving to replenish supplies, prices for coffee currently in U.S. warehouses have already begun to rise. some investors were no longer “offering spot trades in anticipation of the strike developing.”
“We have about 40 containers waiting to be moved,” one coffee trader announced before concluding the initial agreement. “Container owners have already told us they will charge additional fees if it takes longer than usual to return the boxes.”
However, once the strike is called off, ports can start clearing the three-day backlog, with (hopefully) little disruption to day-to-day transactions.
It was a shot across the bow, a fleeting blow, but the blow proved to be an effective bargaining tool and an ace in the hole as the January 15 deadline soon became imminent.
