Anna Nagurney, UMass Amherst

A dockworkers strike that froze operations at East Coast and Gulf Coast ports for 2½ days was paused on Oct. 3, 2024. The Conversation U.S. asked Anna Nagurney, a scholar of supply chains, to assess the extent of disruptions that likely occurred and how the swift return of 45,000 workers who had been on strike may stave off further problems down the road.

Why was the strike suspended?

Aided by intense pressure from senior Biden administration officials, the shipping companies, represented by the U.S. Maritime Alliance, significantly increased the raise they were offering the dockworkers to 62% from their previous offer of a 50% boost in pay. The International Longshoremen’s Association, the dockworkers’ union, was seeking a 77% raise, but it accepted the new offer, which will be phased in over six years.

The agreement labor leaders and management reached will suspend the strike until at least Jan. 15, 2025, allowing more time for additional collective bargaining and negotiations.

Talks over other contested conditions, including the adoption of more automation, will continue until then.

President Joe Biden applauded both sides. He thanked the union and management “for acting patriotically to reopen our ports and ensure the availability of critical supplies for Hurricane Helene recovery and rebuilding.”

How has this strike affected the economy?

About half of the products that the U.S. imports are handled by the ports that were paralyzed during this brief strike. About 1 million shipping containers arrive at these ports every month.

Imports include vast quantities of bananas and other fresh produce, coffee, pharmaceuticals, liquor, toys, apparel, furniture, machinery and vehicles. Exports include meats, commodities, machinery, chemicals, vehicles and vehicle parts.

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The strike’s impact was immediate. More than 50 ships laden with hundreds of thousands of containers created a logjam at East Coast ports. Major retailers, such as Walmart, Costco, Lowes and Home Depot, were among the companies stuck waiting for the release of their stranded cargo.

It may take two to three weeks to relieve this logjam. Prices for some products, including coffee, were already rising before the negotiators reached their breakthrough.

Workers are critical to the functioning of each link in supply chains. When the dockworkers were on strike, other workers, such as truckers, rail employees and warehouse workers, were concerned about being affected, as well as all the businesses that rely on them, such as restaurants.

Why is the new time frame significant?

Shipping tied to the holiday season typically runs from July through early November. Members of the National Retail Federation, the largest U.S. retail trade group, have already been dealing with significant supply disruptions due to Houthi attacks in the Red Sea and Suez Canal. The attacks have forced shipping companies to take longer routes, delaying cargo delivery and increasing costs due to the need for more fuel and labor.

A prolonged dockworkers strike would put stress on the economy. According to J.P. Morgan, a lengthy dockworkers strike could have cost the U.S. economy US$5 billion per day.

The temporary agreement pushes the strike past the U.S. elections in November and the conclusion of the upcoming holiday season. That gives both sides a chance to return to the bargaining table to continue to negotiate and to reach an agreement on the issues that haven’t been resolved yet – notably the use of automation.

Having a shorter strike will reduce the risk of shortages of everything from mangos to Maseratis and the price increases that typically occur when products are scarce and in high demand.

What did the Biden administration do?

The Biden administration was eager for a settlement, especially with the ports serving as channels for recovery supplies after the massive damage seen in Florida, western North Carolina and other areas near the East Coast from Hurricane Helene.

Senior government officials made notable progress when they met with representatives of shipping companies before daybreak on Oct. 3 over Zoom.

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Julie Su, the acting labor secretary, had been working hard to help the two sides settle their differences. She emphasized over Zoom that she could get the International Longshoremen’s Association to the bargaining table to extend the contract. Transportation Secretary Pete Buttigieg also stayed in touch with labor and management, and used that Zoom meeting to tell the shipping companies that they would need to offer the dockworkers a higher wage.

White House Chief of Staff Jeff Zients told the shipping companies on Zoom that they should make an offer to the union quickly so that the strike wouldn’t further exacerbate the effects of Hurricane Helene.

It seems clear to me that the pressure worked – helped, perhaps, by a bit of patriotism.

Anna Nagurney, Eugene M. Isenberg Chair in Integrative Studies, UMass Amherst

This article is republished from The Conversation under a Creative Commons license. Read the original article.

STM Daily News is a vibrant news blog dedicated to sharing the brighter side of human experiences. Emphasizing positive, uplifting stories, the site focuses on delivering inspiring, informative, and well-researched content. With a commitment to accurate, fair, and responsible journalism, STM Daily News aims to foster a community of readers passionate about positive change and engaged in meaningful conversations. Join the movement and explore stories that celebrate the positive impacts shaping our world.

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Anna Nagurney, UMass Amherst

Getting any product to consumers, whether it’s a can of sardines or a screwdriver, requires that supply chains function well.

The availability of labor is essential in each link of the supply chain. That includes the workers who make sure that your tinned fish and handy tools smoothly journey from their point of origin to where they’ll wind up, whether it’s a supermarket, hardware store or your front door.

Amazingly, 90% of all internationally traded products are carried by ships at some point. At the height of the COVID-19 pandemic, it was hard not to notice the supply chain disruptions. For U.S. ports, there were many bouts of congestion. Demand for goods that were either more or less popular than they would normally be became volatile. Shortages of truckers and other freight service providers wreaked havoc on land-based and maritime transportation networks.

Consumers became exasperated when they saw all the empty shelves. They endured price spikes for items that were suddenly scarce, such as hand sanitizer, computer equipment and bleach.

I’m a scholar of supply chain management who belongs to a research group that studies ways to make supply chains better able to withstand disruptions. Based on that research, plus what I learned while writing a book about labor and supply chains, I’m concerned about the turmoil that could be in store for cargo arriving on ships.

Concerns over pay and technology

The International Longshoremen’s Association’s six-year contract with the East Coast and Gulf Coast ports expired on Sept. 30, 2024, at midnight without an agreement. About 45,000 dockworkers are now on a strike that has paralyzed ports from Maine to Texas. Only military cargo and cruise ships, as well as oil, gas and liquid chemicals, can go in and out.

It’s the first such work stoppage for the East Coast ports since 1977.

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Labor and management disagree over how much to raise wages, and the union also wants to see strict limits on the use of automation for cranes, gates and trucks at the ports in the new contract. The union is seeking a 77% increase in pay over the next six years and is concerned that jobs may be lost because of automation. When management offered a nearly 50% raise, the union rejected it.

Dockworkers on the West Coast, who are not on strike, are paid much higher regular wages than their East Coast and Gulf Coast counterparts who are on strike. The West Coast workers earn at least an estimated US$116,000 per year, for a 40-hour work week, versus the roughly $81,000 dockworkers at the East Coast and Gulf Coast ports take home, not counting overtime pay.

Management is represented in the talks by the U.S. Maritime Association, which includes the major shippers, terminal operators and port authorities.

What to expect

Starting on Oct. 1, 36 ports, including those in Philadelphia and Houston, ceased operations due to the strike, blocking almost half of the cargo going in and out of the U.S. on ships.

If the strike lasts just a day, then it would not be noticeable to a typical consumer. However, businesses of all kinds would no doubt feel the pinch. J.P. Morgan estimates that a strike could cost the U.S. economy $5 billion every day.

Even if the strike were to last only a day, it could take about five days to straighten out the supply chain.

If a strike lasts a week, the results would quickly become apparent to most consumers.

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Some shipping companies have already begun to reroute their cargo to the West Coast. Even had there been no strike at all, costs would have risen and the warehouses could have run out of room.

The effects on everything from bananas and cherries to chocolate, meat, fish and cheese could be severe, and the shipping disruption could also hamper trade in some prescription drugs if the strike lasts at least a week.

If the strike were to last a month or more, supplies needed by factories could be in short supply. Numerous consumer products would not be delivered. Workers would be laid off. U.S. exports, including agricultural ones, might get stuck rather than shipped to their destinations. Inflation might increase again. And there would be a new bout of heightened economic anxiety and uncertainty – along with immense financial losses.

All the while, West Coast ports would face unusually high demand for their services, wreaking havoc on shipping there too.

Yes, we’d have no bananas

My research group’s latest work on supply chain disruptions and the effects of various transportation disruptions, including delays, quantifies the impact on the quality of fresh produce. We did a case study on bananas.

This isn’t a niche problem.

Bananas are the most-consumed fresh fruit in the U.S.

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Many of the bananas sold in the U.S. are grown in Ecuador, Guatemala and Costa Rica. About 75% of them arrive at ports on the East and Gulf coasts.

Although bananas are relatively easy to ship, they require appropriate temperatures and humidity. Even under the best conditions, their quality deteriorates. Long delays will mean shippers will be trying to foist mushy brown bananas on consumers who might reject them.

Alternatively, banana growers may opt to find other markets. It’s reasonable to expect to find fewer bananas and much higher prices – possibly of a lower quality. Flying bananas to the U.S. would be too expensive to sustain.

Fresh meat, seafood, cheese and other refrigerated foods could spoil before they can complete their journeys, and fresh berries, along with other fruits and vegetables, could perish before reaching their destinations.

Tons of fresh produce, including bananas arriving after Oct. 1, could end up having to be discarded. That is unfortunate, given the rising food insecurity rate in the U.S.

1947 Taft-Hartley Act

More than 170 trade groups had urged the Biden administration to intervene at the last minute to avoid a strike.

Even now, the government can invoke the 1947 Taft-Hartley Act, which allows the president to ask a court to order an 80-day cooling-off period when public health or safety is at risk.

However, President Joe Biden reportedly does not plan to invoke it. Instead, he has urged the two sides to settle their differences.

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So if you’re planning to bake banana bread or were thinking you might get an early start on your holiday shopping, I’d advise you to make those shopping trips as soon as possible – just in case.

This is an updated version of an article first published on Sept. 28, 2024.

Anna Nagurney, Professor and Eugene M. Isenberg Chair in Integrative Studies, UMass Amherst

This article is republished from The Conversation under a Creative Commons license. Read the original article.

STM Daily News is a vibrant news blog dedicated to sharing the brighter side of human experiences. Emphasizing positive, uplifting stories, the site focuses on delivering inspiring, informative, and well-researched content. With a commitment to accurate, fair, and responsible journalism, STM Daily News aims to foster a community of readers passionate about positive change and engaged in meaningful conversations. Join the movement and explore stories that celebrate the positive impacts shaping our world.

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https://stmdailynews.com/

Alex Hoagland, University of Toronto and Michal Horný, UMass Amherst

Even though preventive care is supposed to be free by law for millions of Americans thanks to the Affordable Care Act, many don’t receive recommended preventive services, especially racial and ethnic minorities and other at-risk patient groups.

The Affordable Care Act exempted preventive services from patient cost-sharing for large chunks of the population. This means that if you receive preventive screening and have private insurance, including through the ACA Marketplace, there should be no copay at time of service, and you shouldn’t get a bill later on. Easy enough, right?

Wrong. Our team of health economists has shown that patients spend millions of dollars every year on unexpected bills for preventive care. The main reason for this is that no specific regulations were put in place to determine exactly which services should be exempted, or for whom, or how often. This omission has left many people on the hook to pay for valuable health care they thought would be free.

Now, in our recently published research in the journal JAMA Network Open, we’ve found that the burden of paying for what should be free preventive care disproportionately falls on some patient groups.

Inequitable claim denials

Looking at data from over 1.5 million patients, our study demonstrates that insurers deny preventive claims for patients from marginalized communities at higher rates than for those from majority groups.

For example, low-income patients were 43% more likely than high-income patients to have their claims denied. In addition, Asian, Hispanic and non-Hispanic Black patients were each roughly twice as likely as non-Hispanic white patients to have claims denied.

Not only were these patients denied routine benefits, but they also saw large differences in rates of billing errors. For example, patients with a high school diploma or less experienced denials due to this kind of billing error almost twice as often than patients with college degrees. All of these services should have been covered by an insurer.

Research on preventive care access is commonly based only on claims data, which doesn’t typically have information on patient demographics. This limits a study’s ability to detect differences across patient groups. Our study, however, uses a combination of linked claims data, remittance data containing information on why claims were denied and whether they were resubmitted, and demographic data from self-reports, purchase transactions and voter registries. Together, this richer dataset allowed us to examine differences in denials based on race and ethnicity, education and income, including reasons why patients were denied care.

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Preventive care is essential

Equitable access to preventive health care is about more than just physicals, although those are important, too. Preventive health care includes key screenings for cancers, cardiovascular disease and diabetes, access to contraceptives, and mental health checkups, among other services. Ensuring that insurers provide equal coverage for these services for all patients is important to improve health outcomes and quality of life for everyone while reducing future health care costs.

Our results paint a picture of the kinds of hurdles patients face when they seek health screenings. Patients from underrepresented groups were not only more likely to be told their care wouldn’t be covered. They were also more likely to have their claims processed incorrectly, leading to more frequent denials and, ultimately, larger medical bills. https://www.youtube.com/embed/Uc2uG6LhFQQ?wmode=transparent&start=0 Few patients appeal claim denials, even though rejections may be unjustified.

Unexpected bills can affect both a patient’s current health and their future use of health care services. These hurdles can exacerbate an already tenuous trust in a fragmented health care system, making patients less likely to return for follow-up screenings.

Stacked coverage denials for patients who live with multiple marginalized identities or who are less able to advocate for themselves can further entrench racial and socioeconomic inequities.

Ensuring equitable access

Our study paints a compelling picture of where different patients may face hurdles for getting preventive care, but more research is necessary to identify how to ensure equitable access.

As our study looked only at preventive services, we will also need to see how our findings generalize to other forms of health care. More research is also needed to understand how other vulnerable patient groups, such as LGBTQ+ patients or patients with multiple chronic conditions, fare when trying to access care.

Our team is currently studying how actual bills for care differ across patient groups and how patients respond when bills arrive. In our study, more than two-thirds of denied claims were never resubmitted to insurers, meaning that many billing errors go uncorrected at patients’ expense.

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Equitable policy on multiple fronts can help rectify the way preventive care is inconsistently and inequitably provided. These include uniform coverage of preventive care by insurers, standardized billing practices for physicians and improved means for patients to advocate for themselves. This can help ensure that everyone has appropriate access to lifesaving health care.

Alex Hoagland, Assistant Professor of Health Economics, University of Toronto and Michal Horný, Assistant Professor of Health Policy and Management, UMass Amherst

This article is republished from The Conversation under a Creative Commons license. Read the original article.

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