Following the strikes of tens of thousands of hotel workers and over 30,000 Boeing employees earlier this month, 45,000 dockworkers on the East Coast of the United States may also join the ranks of striking workers in the coming days.

According to a report by Xinhua News Agency on the 26th, the International Longshoremen's Association of the United States has threatened that if a new agreement cannot be reached between labor and management before the contract expires on September 30th, tens of thousands of workers at more than 30 ports along the East Coast and the Gulf Coast will go on strike. Some industry insiders are concerned that a large-scale port strike could have a "devastating impact" on the U.S. economy and bring a "perfect storm" to the global supply chain.

Analysts warn that a strike would affect dozens of ports from Maine to Texas, potentially causing severe disruptions to U.S. freight transportation. The Oxford Economics Institute stated in its latest report that the strike could involve up to 45,000 port workers, and the affected port shipping volume would account for about 60% of the total U.S. shipping volume.

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The fear is that it could severely damage the global supply chain. Citing media reports, Xinhua News Agency stated on the 26th that the International Longshoremen's Association of the United States is negotiating a new 6-year labor contract with the U.S. East Coast port employers. The International Longshoremen's Association advocates for a significant pay increase in the new contract, citing that over the past 6 years, the U.S. inflation rate has far exceeded the wage increase. In addition, the union also demands a ban on the automation of equipment used for loading and unloading at more than 30 ports. If the two sides fail to sign a new contract on schedule, the strike may begin on October 1st.

As the deadline approaches, more and more people are worried that a large-scale strike at U.S. ports could become a reality. This could be the first large-scale strike at ports along the East Coast and the Gulf Coast since 1977.

Data from the National Association of Manufacturers in the United States shows that about three-fifths of the container freight volume shipped to the United States is transported through the East Coast and the Gulf Coast. Logistics experts say that if the strike disrupts these shipments, the ports on the West Coast of the United States would not be able to absorb all or even most of the freight volume, and the backlog of goods would have serious consequences.

The Danish maritime intelligence company, which provides supply chain data services, estimates that if the strike lasts for one day, it would take five days to clear the backlog of containers at ports along the East Coast and the Gulf Coast. If the strike lasts for two weeks, it would not be until early 2025 that these backlogs could be cleared.JPMorgan Chase's analysis report suggests that a large-scale strike could cost the US economy $5 billion per day, accounting for approximately 6% of the country's daily Gross Domestic Product (GDP). Even if shippers redirect to West Coast ports, congestion may still occur, leading to cargo delays and a significant increase in freight rates.

In terms of market response, some international shipping companies are preparing for a strike shutdown at all East Coast ports. Due to market expectations that the breakdown of labor negotiations will trigger a new round of supply chain disruptions, thereby driving up freight rates, shipping giant Denmark's Maersk Group's stock price has continued to rise, increasing nearly 20% over the two weeks ending on the 24th.

Mike DiAngelis, an executive at the US-based freight visualization platform "FourKites," believes that the global supply chain is still troubled by issues such as the situation in the Red Sea. A strike at US ports would exacerbate the current predicament.

"We are facing a perfect storm. Shipping disruptions in the Red Sea are hindering the normal navigation of the Suez Canal, and the capacity of the Panama Canal is also declining. This port strike would be equivalent to cutting off the main artery of global trade," DiAngelis said.

According to a report by Securities Times, regarding the industries affected by this port strike, Jason Miller, a professor of supply chain management at Michigan State University, pointed out: "In terms of exports, the most affected commodity is plastic resin, and in terms of imports, I believe the most affected industry is the automotive industry, especially considering that automotive parts are an important import product for the US."

"So far this year, the East Coast alone has handled more than 300,000 standard containers (TEUs) and 17,000 less-than-container-load (LCL) shipments of automotive parts and vehicles from original equipment manufacturers and tier-one suppliers," data from consulting firm CH Robinson shows, with 50%-60% of the parts cargo volume coming from Europe and India, and the rest from the Asia-Pacific region.

Miller noted that a shortage of automotive parts supply could put automotive manufacturers in swing states like Michigan and Georgia in a difficult situation. Miller also mentioned another agricultural product that could be greatly affected by the strike—bananas. For consumers, the strike could have a significant impact on the price of bananas in the US.

"So far this year, we have imported more than 2 million tons of bananas, with 66% to 75% entering through ports on the East Coast and the Gulf Coast," he estimated. If the strike lasts for several weeks, the number of bananas in the US consumer market could decrease sharply compared to normal times. Considering that bananas are not easy to store and are prone to spoilage, the supply shortage caused by the strike could further deteriorate.

Is a "soft landing" for the US economy out of the question?According to International Online's report on the 25th, as the Federal Reserve begins a cycle of interest rate cuts, the United States is currently shifting its focus from curbing inflation to promoting economic growth. Analysts believe that if strikes lead to supply chain congestion at this time, not only will economic growth be hindered, but inflation may also make a comeback.

In fact, even if the dockworkers' strike does not occur this time, the U.S. economy is far from optimistic.

The Federal Reserve announced a 50 basis point interest rate cut this month, exceeding the 25 basis points expected by many experts. This is considered to be making the same mistake as the aggressive interest rate hikes initially. The "aggressive interest rate cut" is likely to turn the "soft landing" that Federal Reserve Chairman Powell hopes for into a mirage.

Republican presidential candidate Trump criticized this approach to the media: "Such a large interest rate cut, the economy must be very bad."

Jason Furman, a professor at Harvard University's Kennedy School of Government who served as a senior economic advisor to former President Obama, believes that the current U.S. economic situation is strange because data on gross domestic product (GDP), consumption, and business investment all show a booming trend, but the prospects for the manufacturing industry are not optimistic, and consumers' balance sheets are also worrying. "These contrasts give a sense of foreboding."

In fact, there are already many signs that the Federal Reserve's aggressive 50 basis point interest rate cut has only a fleeting impact on the U.S. market. On the last trading day of last week, only the Dow Jones Industrial Average among the three major U.S. stock indices rose slightly, while the S&P 500 and Nasdaq both fell. This is far from the "water release" market that should have occurred after the Federal Reserve's substantial interest rate cut.

At the same time, the latest data released by the U.S. Conference Board on the 24th local time showed that the consumer confidence index of the organization fell sharply from 105.6 in August to 98.7 in September. This is also the largest single-month drop in the index since August 2021.

Jamie Dimon, CEO of JPMorgan Chase, the largest bank in the United States, who has repeatedly warned about the risks of the U.S. economy, recently warned that the possibility of the U.S. economy achieving a "soft landing" is even smaller after the Federal Reserve's first interest rate cut in more than four years.

"Whether it's a 25 basis point or 50 basis point rate cut, it won't have a shocking impact, because the uncertainty of the U.S. real economy and inflationary pressures have never disappeared."