by Doyinsola Oladipo and David Shepardson

NEW YORK (Reuters) – Dockworkers on the U.S. East Coast and Gulf of Mexico began a strike on Tuesday, the first of this magnitude in nearly 50 years, massively disrupting the flow of shipping across the country.

After wage negotiations failed, the strike caused disruptions at dozens of ports, which analysts say will cost the economy billions of dollars a day, threatening jobs and stoking inflation .

The International Longshoremen’s Association (ILA), representing 45,000 port workers, was negotiating a new six-year contract with the United States Maritime Alliance (USMX) employer group before a deadline of midnight on September 30.

The ILA said in a statement Tuesday that it closed all ports from Maine to Texas at 12:01 a.m. local time (6:01 a.m. BST) and rejected the USMX’s latest proposal made Monday, adding that the The offer was “well below the demands of its members to ratify a new contract”.

ILA leader Harold Daggett said shipping employers, such as container ship operator Maersk and its subsidiary APM Terminals North America, have not responded to calls to stop the automation projects in ports and did not offer appropriate salary increases.

“We are prepared to fight as long as it takes, to stay on strike as long as it takes, to get the wages and protections against automation that ILA members deserve,” Harold Daggett said Tuesday .

“The USMX is now responsible for this strike. They must now respond to our demands for this strike to end,” added the union leader.

The USMX said in a statement Monday that it had proposed raising wages by nearly 50% compared to an earlier proposal. Contacted by Reuters, the group did not respond to requests for comment.

MITIGATING THE IMPACT

This historic strike, the first of the ILA since 1977, paralyzes 36 ports and affects different sectors, from food to automobiles, worrying companies dependent on maritime transport.

“We expect the strike to last five to seven days until the government intervenes (…) But the ripple effect should be felt throughout the networks towards Europe and the “Asia at least until January and February,” said Peter Sand, chief analyst at shipping pricing platform Xeneta.

Retail giant Walmart, the largest container shipper in the United States, and operator Costco said they were doing everything they could to soften the impact of the strike.

In the New York area, nearly 100,000 containers are waiting to be unloaded as 35 container ships head to New York over the next week, said Rick Cotton, executive director of the New York Port Authority. and New Jersey.

New York State Governor Kathy Hochul said the state does not expect immediate repercussions on suppliers of food or essential goods, but that the situation could worsen depending on the duration of the crisis.

“It is essential that the USMX and ILA quickly reach a fair agreement that respects workers and ensures the flow of commerce at our ports,” she said Tuesday.

With strikers threatening crucial goods exports and imports, White House Chief of Staff Jeff Zients and top economic adviser Lael Brainard on Monday urged USMX board members to resolve the conflict fairly and quickly.

Pro-worker, the Biden administration has repeatedly ruled out using federal powers to end the strike in the event of an impasse.

U.S. Chamber of Commerce President Suzanne Clark on Monday urged the president to reconsider, saying it would be “unconscionable to allow a contract dispute to inflict such a shock on our economy.”

The White House had no comment Tuesday, but officials told Reuters, on condition of anonymity, that they hoped for a short strike. They highlighted the fact that the two sides had resumed negotiations late Sunday and had narrowed their differences over the past 24 hours.

(Reporting by Doyinsola Oladipo, with contributions from Gursimran Kaur, Nilutpal Timsina, Shivani Tanna and Shubham Kalia in Bengaluru, David Shepardson in Washington and Stine Jacobsen in Copenhagen; edited by Richard Valdmanis and Miyoung Kim; Etienne Breban, edited by Kate Enter)

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