Depending on your social circle the first week in October, your feeds this weekend might have been buzzing with news about Diddy’s accusers or the upsets in college football. But what the internet should have talked about was a far bigger issue with dire consequences for small businesses and consumers. That issue was the three-day strike that happened at seaports along the East and Gulf Coasts and the consequences that could last for weeks or months to come. 

Thousands of dockworkers from Maine to Texas went on strike from October 1st thru 3rd, after their union and employer failed to reach a deal before the labor contract expired. It was the first East Coast port strike in almost 50 years, causing cargo movement to grind to a halt. Drayage trucking companies that do the critical job of transporting containers to and from ports were left in a lurch. 

Late Thursday, the union and employer reached a tentative agreement on wages and agreed to extend the contract until Jan. 15, 2025, continuing negotiations in the meantime. Dockworkers went back to work Friday. But another strike isn’t out of the question.

If you’re catching up on the latest news, or wondering how we got here in the first place, here’s an in-depth look at what happened at the ports and why it’s still something to keep an eye on that could have catastrophic results in the coming months.

Why did they strike?

The International Longshoremen’s Association workers called for pay hikes and job security in the face of automation. The union claimed the shipping lines have recently made record profits, but their workers haven’t seen those earnings reflected in their paychecks. 

The union wanted an additional $5 per hour per year worked into the six-year agreement. For the top-paid dockworkers, that would result in a raise from $39 hourly to $69 after six years, a 77% increase. Meanwhile, the employer, the U.S. Maritime Alliance (USMX), said its offer would increase wages by 50% and keep the same contract language around automation.

The two sides traded various offers in the 24 hours leading up to the strike but didn’t reach an agreement until Thursday, when the USMX agreed to a 61.5% wage increase spread over six years. 

Why was it a big deal?

The domino effect of this strike was massive. 

When dockworkers aren’t working, cargo isn’t moving. Drayage truckers couldn’t return empty containers or pick up loaded ones. Cargo ships started to idle off the East and Gulf Coasts waiting for a spot to anchor, unload, and reload. On Sunday, just three container ships were waiting to anchor near ports. By Thursday, that number was 54. 

Beneficial cargo owners couldn’t receive inventory or export goods they’ve produced. In the coming weeks, they’ll face a 10-20% decline in shipping capacity on Transatlantic and Asia-East Coast routes.

The affected ports represented more than half of inbound port traffic in the U.S., according to Goldman Sachs. By some estimates, this strike cost the U.S. economy $4.5 billion per day. The Port Authority of New York and New Jersey alone lost between $250-300 million each day during the strike. 

How were businesses affected?

Drayage trucking companies are at the front lines of the supply chain. Many of these firms are small businesses or independent owner-operators, and they were put out of work.

One drayage company owner, who normally hauls aluminum and solar panels to and from Port Houston, was trying to figure out how to continue to pay his employees and the company’s bills. Another Houston-area trucking company president said he was worried about his owner-operator drivers: “They’re sitting without a paycheck, basically.” And a Baltimore-based drayage firm said only 3 of its 20 drivers were able to work Wednesday when the strike was occurring. 

Operations didn’t resume immediately, either. While dockworkers returned to work Friday monday, some ports held off on allowing trucks back in or restarting operations until later, because they needed time to reposition containers. The Port Authority of New York and New Jersey restarted cargo operations Friday evening, and the Port of Virginia reopened Saturday. 

Even a few days out of work can devastate small businesses working hard to keep supply chains and the economy churning. “The longer it goes, those folks are going to be really hung out to dry,” said American Trucking Associations President Chris Spear before the strike ended.

What about consumers?

Fortunately, the strike ended soon enough that consumers shouldn’t feel too much of an impact. For any businesses that imported goods via other freight modes or locations, they faced higher costs, which they’ll now likely pass along to consumers. 

Car parts, furniture, fruit and toys are among the top imports at East and Gulf Coast ports, so costs of any and all of those goods could be affected, just in time for the holiday shopping season. Some consumers also resorted to “panic buying” in anticipation of shortages. (Remember 2020’s run on toilet paper?) 

"At the end of the day, the only one who's going to end up paying the bill for this is the U.S. consumer, simple as that,” said shipping consultant Lars Jensen.

Why didn’t everyone just use other ports?

In theory, cargo owners could have redirected freight to ports in Atlantic Canada or the U.S. West Coast, then shipped via rail or truck to the next destination. This could take longer, potentially clog up other ports, and add shipping costs – a bill which consumers will ultimately foot. 

Meanwhile, cargo trapped at shutdown ports would still remain idle, and drayage companies that transport to and from their nearby ports would continue to be out of work. 

What happens now?

Ports have reopened, dockworkers are back to work, and operations are largely resuming. But it will take time for businesses to recover any losses from the days out of work. By one estimate, each day of the strike requires one week to clear the backlog, meaning a three-day strike could result in three weeks of recovery time. 

There’s also the possibility that workers will strike again if a new deal is not yet in place by Jan. 15. ILA and USMX still have to hammer out protections related to automation, healthcare and container royalty. ILA President Harold Daggett has previously said the union is ready to “fight as long as necessary, to stay out on strike for whatever period of time it takes.” 

Ports, drayage trucking companies, importers and exporters will continue to watch what happens over the next three months, staying on their toes about any possible disruptions coming to ports at the start of next year. 

Shipping lawyer Alison Cusack’s advice: “Prepare for the worst, hope for the best.”