How much bargaining power did the two sides have in the recent dock workers' strike?
For shippers, what is the cost of a one day delay in coming to terms? The port of New York handled 6.6 million Twenty-foot Equivalent Unit (TEU) containers in 2022, but the East cost and Gulf coast ports for which data are available handled ~21 million. The average value of a TEU is $54.500. Assume firms have a 20% annual discount rate for a little back-of-the-envelope calculation.
| Port of New York | All Affected Ports | Units | |
| Volume Handled 2022 | 6.6 | 20.8 | Million TEU |
| Value of TEU 2020 | $54.5 | $54.5 | $Thousands |
| Annual Value | $359.7 | $1,133.6 | $Billion/Year |
| Daily Value | $985.5 | $3,105.8 | $Million/Day |
| Daily Carrying Cost | $540.0 | $1,701.8 | $Thousand/Day |
The carrying cost alone is over $1.7 million per day, perhaps more in 2024 due to inflation and increases in trade volume. This is also a lower-bound since there will also be production disruptions & spoilage of goods. The cost to shippers might come to $3-5million per day.
What is labor's cost of a one day delay in coming to terms? The earnings of the 45,000 affected dock workers could be anywhere from $39/hour to $200,000/year. Suppose half of these would have worked on any day and that a typical day is eight hours of work, the 45,000*0.5*$39/hour*8hours = ~$7million per day. This is an upper-bound since opportunity cost of workers time is not $0. The cost to workers might be $3-5million per day.
You can adjust any of these assumptions as you deem appropriate, but it seems that the two parties were pretty evenly matched.
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