Instant Reaction: US Dockworkers Suspend Strike

Bloomberg Audio Studios, Podcasts, radio news from Bloomberg World Headquarters 0:00:08.840 --> 0:00:11.520 in New York. I'm Doug Prisoner, and we begin with 0:00:11.560 --> 0:00:15.800 this breaking news. The union representing striking US dock workers 0:00:16.200 --> 0:00:20.080 at East and Gulf Coast ports has reached a deal 0:00:20.200 --> 0:00:24.319 to suspend its strike until January fifteenth. Let's get a 0:00:24.400 --> 0:00:28.319 closer look now with Bloomberg's Kate Davidson, Managing editor for 0:00:28.680 --> 0:00:31.840 US ECO Policy, joining us from Washington, d C. Thanks 0:00:31.880 --> 0:00:35.600 for making time, Kate. As I understand it, both sides 0:00:35.640 --> 0:00:39.080 have reached a tentative agreement on wages, right, although this 0:00:39.240 --> 0:00:40.879 is step one and trying to get to a new 0:00:40.920 --> 0:00:43.639 six year contract, right, that's right. 0:00:43.680 --> 0:00:46.040 I mean, one of the bigger issues that was really 0:00:46.159 --> 0:00:48.880 holding up an agreement here had to do with automation. 0:00:49.440 --> 0:00:52.599 The union workers or some forty seven thousand dock workers 0:00:52.920 --> 0:00:55.920 at these ports, you know, stretching from Houston to Miami 0:00:55.960 --> 0:00:58.440 to Boston. One of the things that they wanted, we're 0:00:58.480 --> 0:01:01.920 greater protections against the kind of automation that we've seen 0:01:01.960 --> 0:01:04.320 at ports on the West coast, and so that was 0:01:04.360 --> 0:01:07.640 a real sticking point. This tentative agreement doesn't address that, 0:01:08.120 --> 0:01:10.880 but it does go some way toward addressing some of 0:01:10.920 --> 0:01:13.319 the wage demands. So they've agreed, as you said, to 0:01:13.360 --> 0:01:16.080 a temporary deal that would at least allow them to 0:01:16.120 --> 0:01:18.840 start moving cargo again. And that was under some you know, 0:01:18.880 --> 0:01:21.040 fairly intense pressure from the White House, I think, over 0:01:21.120 --> 0:01:24.680 the past few days. And so we in the meantime 0:01:24.840 --> 0:01:27.000 between now and January fifteenth, I have to keep working 0:01:27.040 --> 0:01:29.039 on that broader contract agreement. 0:01:29.200 --> 0:01:32.440 So will work us be back on the docks tomorrow? 0:01:33.840 --> 0:01:35.960 That's certainly what it sounds like. You know, the International 0:01:35.959 --> 0:01:39.839 Longshoreman's Association said it had agreed to extend the contract 0:01:40.160 --> 0:01:42.600 and said work will resume. So I don't think we 0:01:42.680 --> 0:01:44.800 know the exact details. We know that they've sort of 0:01:44.840 --> 0:01:49.000 began slowing down operations on Monday ahead of the midnight deadline, 0:01:49.040 --> 0:01:50.760 so imagine it will take them a little bit of 0:01:50.800 --> 0:01:52.360 time to get things up and running. But yeah, I 0:01:52.360 --> 0:01:54.760 think that I think that some of those dozens of 0:01:54.760 --> 0:01:56.840 ships that we've seen that are now anchored off to 0:01:57.040 --> 0:01:59.600 these ports where we'll start getting moving again. 0:02:00.080 --> 0:02:01.880 Yeah, give me a sense of scale, what does that 0:02:01.960 --> 0:02:05.400 look like? Hard to imagine how many cargo vessels are involved. 0:02:06.520 --> 0:02:08.360 Yeah, so we know that it had gone that we 0:02:08.400 --> 0:02:11.160 had seen those numbers and then ticking up over the 0:02:11.200 --> 0:02:13.680 last few days. Since just since Monday, I think there 0:02:13.800 --> 0:02:17.440 was something like nineteen ships that were just waiting off 0:02:17.520 --> 0:02:19.639 the off the coast of some of these ports, and 0:02:19.680 --> 0:02:21.840 as of this morning, I think the latest CALLI was 0:02:21.919 --> 0:02:25.760 up up to forty three or so. So obviously they're 0:02:25.880 --> 0:02:29.400 just unloading many, many, many, many containers of goods. I mean, 0:02:29.440 --> 0:02:32.680 these are these are cars, these are you know, clothing, 0:02:33.320 --> 0:02:36.400 it's auto parts, it's fresh fruit, all of these things. 0:02:36.400 --> 0:02:38.320 I mean that some of the estimates that we saw 0:02:38.400 --> 0:02:41.520 for that their lost economic activity was as much as 0:02:41.520 --> 0:02:43.519 a billion to five billion dollars a day. 0:02:43.960 --> 0:02:46.520 Was it already beginning to impact to the way that 0:02:46.880 --> 0:02:47.880 cargo is priced. 0:02:49.160 --> 0:02:51.680 So it's interesting there was some debate about that because 0:02:52.120 --> 0:02:53.960 it looked like some of the prices had gone up 0:02:53.960 --> 0:02:56.520 a bit. But we were starting to hear some claims 0:02:56.760 --> 0:02:59.160 from some of the union voices and their allies that 0:02:59.600 --> 0:03:03.800 the shipping companies, the shipping lines were price gouging. We 0:03:03.840 --> 0:03:06.440 saw the White House warning them against this. There were 0:03:06.440 --> 0:03:09.120 some pretty high figures being tossed out there, and some 0:03:09.200 --> 0:03:11.440 of these shipping lines pushed back on that they said 0:03:11.440 --> 0:03:14.320 that the prices were not going as high as some 0:03:14.360 --> 0:03:17.520 people were saying. Oh, they called it misinformation. So certainly 0:03:17.520 --> 0:03:22.080 there was starting to be some impact, but nothing major 0:03:22.160 --> 0:03:24.720 and certainly not to the highs that we saw during 0:03:24.720 --> 0:03:26.480 the pandemic supply chain crunch. 0:03:26.600 --> 0:03:29.799 When we think about the approaching holidays fourth quarter, this 0:03:29.880 --> 0:03:32.880 is a critical time right for moving cargo. Do we 0:03:33.040 --> 0:03:37.480 know that supply chain problems have been alleviated up until 0:03:37.480 --> 0:03:37.920 this point. 0:03:39.040 --> 0:03:41.560 Yes, So it seems as though, you know, a lot 0:03:41.600 --> 0:03:44.240 of the companies involved had gotten much better some of 0:03:44.280 --> 0:03:46.320 the issues that we did see during the pandemic, and 0:03:46.400 --> 0:03:51.440 they're much better prepared. The conversations around this potential strike 0:03:51.480 --> 0:03:55.040 and these negotiations that had stalled back in June were 0:03:55.120 --> 0:03:58.080 pretty well known, and we had started to see companies 0:03:58.400 --> 0:04:01.720 importing a lot more. We saw them stockpiling inventories because 0:04:01.720 --> 0:04:05.000 of this issue and also in anticipation of potentially higher 0:04:05.080 --> 0:04:07.560 tariffs that they were sort of bracing for later in 0:04:07.560 --> 0:04:10.480 the year or if next year, if there's a change 0:04:10.480 --> 0:04:13.240 in the administration in the White House of President former 0:04:13.280 --> 0:04:15.720 President Trump comes back in. We were starting to get 0:04:15.760 --> 0:04:18.159 a sense that companies were preparing for this a little 0:04:18.160 --> 0:04:20.599 bit so, I think that the retailers had taken some 0:04:20.680 --> 0:04:23.720 steps in are likely pretty well positioned. There shouldn't be 0:04:23.720 --> 0:04:26.039 a major impact, but I think we will find out 0:04:26.279 --> 0:04:27.839 more details over the coming week. 0:04:28.120 --> 0:04:30.800 Kate, thanks so much for joining us a Bloomberg's Kate Davidson, 0:04:30.880 --> 0:04:35.120 Managing editor of US Eco Policy, helping us understand our 0:04:35.120 --> 0:04:38.760 breaking story the union representing striking US stock workers at 0:04:38.920 --> 0:04:42.400 East and Gulf Coast ports reaching a deal to suspend 0:04:42.440 --> 0:04:44.919 to strike until January fifteenth,