Investing.com — Shares in shipping firms slumped on Tuesday after dockworkers on the US East Coast and Gulf Coast began a strike as they demanded better pay and protections against automation.
The stoppage — the first full-scale labor action carried out by dockworkers in almost half a century — threatens to stem the flow of around half of American shipping.
Shipments of everything from food to cars have been blocked on ports stretching from the state of Maine in the US Northeast to Texas in the country’s south.
Analysts have flagged that the strike may not only put jobs at risk and cost the economy billions of dollars a day, but possibly reignite waning inflationary pressures.
The walkout comes after talks failed between the International Longshoremen’s Association (ILA), which represents around 45,000 of the dockworkers, and the United States Marine Alliance (USMX) employer organization. The ILA had been pushing for a revamped six-year contract to be agreed on before a deadline of midnight on Sept. 30.
However, the ILA refused the USMX’s final offer put forward on Monday, arguing that it did not meet the demands of its members. In a statement, the USMX had said it had proposed an almost 50% wage increase, an improvement from an earlier offer.
“We are prepared to fight as long as necessary, to stay out on strike for whatever period of time it takes, to get the wages and protections against automation our ILA members deserve,” said ILA leader Harold Daggett, according to Reuters.
Following the start of the strike, shares in Denmark’s AP Moeller – Maersk (CSE:) fell by 5% in European trading. The ILA said that the container shipping group and its APM Terminals North America unit were among the employers who had not offered sufficient pay hikes or agreed to demands to halt port automation projects, Reuters reported.
Meanwhile, Maersk peer Hapag Lloyd (ETR:) in Germany shed 4% and US-listed shares in Israel’s ZIM Integrated Shipping (NYSE:) dipped in premarket trading.
(Reuters contributed reporting.)
