Why Dockworkers Are Concerned About Automation
1 month ago
Why Dockworkers Are Concerned About Automation
Dockworkers at East and Gulf Coast ports are set to strike at midnight, raising concerns about significant disruptions to the U.S. supply chain. Mark Szakonyi, an expert in container shipping and logistics from S&P Global Market Intelligence and executive editor of the Journal of Commerce, discusses the International Longshoremen's Association's (ILA) demands with Seana Smith and Madison Mills on Catalysts.
Szakonyi notes that the ILA has taken a firm stance against automation in these regions, stating, "While there is some semi-automation at certain rail facilities, they are determined to resist further advancements." He adds that the union's push against automation reflects a broader trend among labor organizations in Western economies, where concerns about job losses are prevalent despite the potential safety benefits of automation. "This wage debate is primarily about salaries," he emphasizes.
Experts believe that the duration of the strike will be pivotal in determining the extent of the supply chain disruption. Szakonyi observes, "Both sides seem to be entrenched. Since June, U.S. employers have attempted to engage with the ILA about ten times, but those efforts have yielded no results. The ILA's rhetoric has been quite aggressive."
He anticipates that intervention from the Biden administration may be necessary. Although the administration has indicated no intention to invoke the Taft-Hartley Act to break up the negotiations, Szakonyi suggests that this stance could change as costs escalate. Morgan Stanley estimates that the strike could result in a staggering $45 billion in daily economic impact.
"It will be fascinating to see how the Biden administration navigates this situation," he adds. They face the challenge of supporting labor relations, particularly with Democrats backing presidential candidate Kamala Harris, while also demonstrating economic leadership. As the strike prolongs, the economic ramifications will intensify, potentially creating additional ripple effects throughout the economy.
Source: Yahoo Finance