06:32 AM EDT, 10/01/2024 (MT Newswires) -- The International Longshoremen's Association union launched a strike along the East and Gulf Coast ports early Tuesday after rejecting the United States Maritime Alliance's final proposal on a new contract.

Tens of thousands of dockworkers began picketing at waterfront facilities on the Atlantic and Gulf coasts shortly after midnight, shuttering ports from Maine to Texas. The strike represents the first shutdown of these ports in almost 50 years and is raising concerns about the economic cost of the stoppage on companies and consumers.

The alliance known as USMX, which represents terminal operators and ocean carriers, had offered to increase wages by "nearly 50%" and "retain the current language around automation and semi-automation," among other proposals in the new master contract, it said Monday. The ILA, which represents about 85,000 workers, said the last offer "fell short" of what its members were demanding in wages and protections against automation for them to ratify the contract.

"We are prepared to fight as long as necessary, to stay out on strike for whatever period of time it takes, to get the wages and protections against automation our ILA members deserve," ILA President Harold Daggett said in a statement on the union's Facebook page. USMX didn't immediately respond to MT Newswires' request for comment after the strike began.

The strike could cost the world's biggest economy $540 million a day, the Conference Board said in a statement on Monday. Electronics and automobiles are among the most likely products to be affected, it said.

"Even a short port strike could cause supply chain interruptions for weeks," the board said. The 36 East and Gulf coast ports handle 57% of US container volume, the group added.

Shutting the ports is likely to pile on logistical and supply chain costs and potentially lead to product shortages for many retailers, Truist Securities said in a late Monday note. Companies expect the impact of the strike to be minimal in the short term given the contingency plans they have put in place, but an extended strike is anticipated to result in costs and sales headwinds, analysts led by Managing Director Scot Ciccarelli said.

"In our view, the heaviest negative impacts would likely be on Dollar Tree ( DLTR ) , Five Below ( FIVE ) , Target ( TGT ) , Best Buy ( BBY ) and Walmart ( WMT ) ," Ciccarelli said. "But it would likely be a headwind of some level across the board."

Nearly two-thirds of US trade is set to be impacted by the strike, potentially affecting the delivery of various products ranging from fruits to alcohol to auto parts and Christmas trees, Stifel Economics said in a separate client note Monday.

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