What The Longshoremen’s Strike Is Really About – And Why It Matters

Perhaps you’re familiar with the term “October surprise.”

You may see pundits and reporters on cable news use the term during presidential election years. Basically, it refers to a news event that has the potential to change the political calculus of a campaign – and, potentially, the election itself.

With the presidential election on November 5, any major news that happens (or is leaked) during October could influence voters.

Well, it’s the first day of October… and we’ve already got two surprises: Iran’s missile strike on Israel and the longshoremen’s strike. In today’s Market 360, we’re taking a look at the strike.

In short, the International Longshoremen’s Association had been negotiating with the U.S. Maritime Alliance over a new labor contract. The union, which represents about 45,000 dockworkers, was threatening its first major strike since 1977.

Well, at midnight on Tuesday, negotiations broke down, and the strike officially commenced.

This is a big deal, folks.

The longshoremen’s strike impacts three dozen locations at 14 U.S. ports from Maine to Texas, effectively stopping containers from being shipped to and from our Eastern Seaboard and Gulf Coast ports. A two-week strike would disrupt holiday sales, impact supply chains for medications and other essential products, and create shortages of items like alcohol, chocolate, fruits, vehicles and even parts vital to U.S. factories.

These ports handle about 50% of goods shipped to and from the U.S. So, a prolonged strike – one that lasts weeks – would delay shipments and create goods shortages ahead of the busy holiday shopping season.

If this strike persists, it is going to be incredibly disruptive to the U.S. economy. It could even reignite inflation, which the Federal Reserve has been fighting to rein in for years.

And believe it or not, it has everything to do with artificial intelligence.

Let me explain that…

And one step you can take in order to avoid sharing the dockworkers’ inevitable fate.

What the AI Revolution Has to Do With the Strike

Now, the longshoremen have been offered a 50% pay increase over the next six years. But they have reportedly stood by their initial demand for a 77% increase.

I realize the effect of inflation over the past few years has been devastating for a lot of middle- and working-class families. So, understandably, everyone wants to get paid more.

But that’s not what the strike’s really about… It’s all about job security from artificial intelligence-powered robotic automation.

The dockworkers are worried about the ports getting automated and losing their jobs in the long term. And reports indicate they want assurances that there will be a total ban on automation.

In other words, no robots when it comes to loading and unloading freight. That includes cranes, gates and moving containers.

Unfortunately, I’ve got bad news for these folks.

Automation and AI are coming whether they like it or not. The proverbial horse has left the barn.

If we were to ban automation at our ports, it would put the U.S. economy at a major competitive disadvantage. I doubt the Chinese are going to ban automation at their ports, for example.

The fact of the matter is AI is going to completely reshape our world in the months and years to come.

Unfortunately, plenty of companies – thousands of companies – will fail to adapt. They’ll be rendered completely obsolete as AI technology reshapes the business landscape.

AI technology will usher in sweeping societal changes… just like the personal computer, the internet, and the smartphone did. Only the changes this time will be even faster and more disruptive.

And robotic automation is one of them.

The reality is robots don’t sleep. They don’t take vacations. They never need a break. They’re more efficient. And they don’t go on strike, either.

This post originally appeared at InvestorPlace.

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