Since the start of the dockworkers’ strike on Tuesday (1 October), wholesale shops like BJ’s and Costco have been treated to scenes of shoppers flocking to their stores. The phenomenon is reminiscent of previous epidemics, with consumers once again showing a tendency to stock up. According to the latest report, many people seem reluctant to take risks in the face of an uncertain supply chain and are therefore choosing to stock up on essentials in advance.
According to PIX11, a reporter’s video shows a long line outside a Costco in northern New Jersey on Thursday morning (3 October). One Costco member said, ‘We really wanted to come in and get toilet paper, but there was none left. When we came, we saw people pushing shopping carts full of seven or eight packs of toilet paper away. They said to come back tomorrow.’ Such a situation is also prevalent in other retail outlets and consumer unrest is spreading.
Government steps in to ensure stable supply
This is despite New York Governor Kathy Hochul’s warning against stockpiling. The governor assured on Monday (30 September) that the state government is working to ensure that critical supplies like food and medical supplies remain available. ‘We don’t anticipate shortages of basic supplies anytime soon, so people don’t need to rush to the shops to stock up on supplies like they did during the outbreak,’ Hochul said. The Department of Homeland Security has also been coordinating with state agencies to address any potential shortages and draw on state stockpiles if necessary. The policy was initially intended to ease public panic through transparency of information, but the market reaction appears to be unusually strong.
As the strike continued, market concerns about the supply chain intensified, and consumer panic was especially evident during the holiday shopping season. On Thursday, a temporary suspension of the strike was agreed, with the union representing 45,000 dockworkers at East and Gulf Coast ports suspending an already three-day strike until 15 January next year to buy time to negotiate a new contract. The dockworkers will reopen early Friday morning to resume normal operations.
Progress and future prospects
The two associations involved in the negotiations are the International Longshoremen’s Association (ILA), which represents longshoremen, and the U.S. Maritime Alliance (USMX), which represents ports and shipping companies. The ILA said the unions would return to work immediately and reached a preliminary agreement with USMX involving wage increases, among other things, but specific details have not been released. According to a joint statement issued Thursday night by the port and the union, negotiations are ongoing and the two sides hope to reach a comprehensive agreement in the near future.
A source close to the situation revealed that the port has increased the pay increase from about 50 per cent to 62 per cent over a six-year period. However, with the agreement yet to be finalised, any pay rises will have to be ratified by union members when the final contract is passed, leaving some distance still between union members’ expectations and reality.
The strike, which started largely due to disagreements over wages and port automation, was launched by the ILA in the early hours of Tuesday morning. The strike involves 36 ports, stretching from Maine to Texas, and carries about half of all U.S. imports and exports. The decision to go on strike was a considered one by the dockworkers, who realised that the introduction of port automation could pose a threat to their job prospects.
One of the key points of contention in the strike is the introduction of automation in the port, which the unions believe will threaten the employment opportunities of dockers. They strongly opposed automation and demanded a total ban on automation technology in the port. In addition, the two sides disagreed over wage increases, pension contributions and the distribution of royalties paid by workers when handling containers. These issues are not only in the interest of the workers, but also in the future sustainability of the port’s operations.
The strike comes during the peak holiday shopping season, which heightens the risk of merchandise shortages, especially if the strike lasts more than a few weeks. However, most retailers have stocked or shipped items in advance of the possibility of a dockworkers’ strike to ensure that consumer demand can be met during the critical shopping season.
‘By the grace of God and the goodwill of our neighbours, this agreement will hold.’ President Joe Biden told reporters Thursday night. The Biden administration is closely monitoring developments to ensure the stability of the nation’s economy.
Union members are not required to vote on the temporary suspension of the strike. Until 15 January, workers will continue to work under their old contracts, which expired on 30 September. Whether the two sides can reach a long-term agreement remains an open question in the coming months as negotiations continue.
