Dockworkers and their employers reached a tentative deal for wage increases, suspending their three-day strike last week. But negotiations will continue as the parties seek agreements on automation and retirement benefits before the temporary deal expires in mid-January, which could lead to another strike.
The employers, represented by the United States Maritime Alliance (USMX), agreed to increase wages by 62% over a new six-year contract. The strike closed major ports along the East and Gulf coasts that handle nearly half of the country’s total imports, backlogging dozens of ships and impacting about 4,500 workers in tri-state area ports.
“This was a very sensible decision from both parties to have wages settled so dockworkers can continue to work,” said Kaushik Sengupta, the chair of Hofstra University’s Department of Management and Entrepreneurship. “Supply chains are well-oiled machines and cannot adjust to any kind of disruptions. ”Without longshoremen, ports cannot operate as they are responsible for moving cargo off ships and into facilities.
In the resumed talks, automation may cause a rift between the union and USMX. As industries seek to implement more automated technologies, questions will be raised about the longshoremen’s duties and the impacts on their jobs.
“There will be some level of automation implemented, but how will that change the work design?” Sengupta said. “There has to be a happy medium to increase efficiency but also still employ the workers.”
Many companies anticipated a strike and either diverted their shipments to West Coast ports or stocked their warehouses on inventory needed for the next few months. New York State even stockpiled 100,000 containers filled with consumer goods, so if the strike continued, non-perishable goods would not be affected.
“We would have seen a much more significant effect on perishable items like bananas,” Sengupta said. “Most, if not all, of our bananas are imported. There is no fallback strategy for perishable products.”
A prolonged strike would’ve seen shortages in alcohol imported from Europe, South America, and the Caribbean, as well as seafood like cod from Iceland and shrimp from Thailand. The strike would not have affected goods like toilet paper, yet some grocery stores and wholesale clubs on Long Island ran low on supplies due to consumers panic-buying.
“Consumers have to be educated on which products will be affected by disruptions,” Sengupta said. “Toilet paper isn’t imported. People should not start panic-buying in situations like this and learn to make more rational decisions on which goods to purchase.”
Since the severe supply chain disruptions from the COVID-19 pandemic, companies have changed their inventory strategy. They increased their stockpiles, especially hospitals and medical providers, to decrease the likelihood of running out of essential goods. However, Sengupta said that the supply chain is still recovering from that era.
“This might be the normal scenario; we’re going to have to have disruptions for various factors off and on, and we are going to have to deal with it,” Sengupta said. “You can't not have disruptions given how the situation of the whole system and environment is at this point. It’s not entirely stable.”
