Update: Port workers and operators in the U.S. have come to an agreement to halt the East Coast strike effective immediately on Oct. 3.Find out more.

Over 45,000 dockworkers initiated a strike Tuesday at midnight due to a salary disagreement, shutting down 36 ports stretching from Maine down to Texas. This halt affects around 50% of U.S. shipping and could influence what products are available for consumers.

Long-lasting disruptions in imports and exports could potentially cost the U.S. economy $5 billion per day, as per an analysis by JPMorgan. Smaller businesses are particularly at risk from this situation.

At the heart of the disagreement are two significant entities in U.S. shipping: the International Longshoremen’s Association, which represents the dockworkers, and the United States Maritime Alliance, an organization comprising shipping companies, port terminal operators, and port authorities.

This strike marks the first significant action at Eastern and Gulf ports since 1977 when ILA dockworkers went on strike for 60 days.

Economic Impact of the Strike

According to reports by Reuters, the affected ports account for about half of the U.S. ocean imports. This strike could hamper the availability of a variety of products—from food and clothing to machinery and vehicles—that come in via container ships.

Additionally, the cost of shipping is likely to increase, a burden that would fall on consumers.

Should the strike persist for an extended period, it may lead to significant delays and congestion at the ports, warns Reuters.

For every day of the strike, it typically takes about three to five days to clear the backlog and return to normal operations, according to Jonathan Gold, vice president of supply chain and customs policy at the National Retail Federation, as reported by YSL News.

The JPMorgan analysis suggests a ratio of 6:1 when accounting for shipping delays due to the strike, meaning it could take approximately six days to manage the backlog created by just one day of halted shipping.

Reasons Behind the Dockworkers’ Strike

The union is pushing for wage increases of 77% over a period of six years while expressing willingness to continue negotiations with the maritime alliance, as reported by The Wall Street Journal. In contrast, the maritime alliance proposed a 50% increase over the same timeframe.

Moreover, the union seeks a prohibition on the use of automated cranes, gates, and trucks at the ports, according to CBS News.