Gas prices in the United States fell below $4 a gallon on Thursday, retreating to their lowest level since March, a sign of relief for Americans struggling with historically high inflation and a political boost for President Biden, who has been under pressure to do more to bring down prices.
The national average cost of a gallon of regular gasoline now stands at $3.99, according to AAA. That’s still higher than it was a year ago but well below a peak of nearly $5.02 in mid-June. The average price has fallen for 58 consecutive days.
Energy costs feed into broad measures of inflation, so the drop is also good news for policymakers who have struggled to contain rising prices. It is a welcome development for Mr. Biden, who has spent recent weeks trumpeting the drop in gasoline prices, even as he pledges to do more to bring costs down. Mr. Biden has criticized oil companies for their record profits, and this year he released some of the nation’s stockpile of oil in an effort to reduce price pressures.
cost of gasoline at the pump is determined by global oil prices, which have tumbled to their lowest point since the war in Ukraine began in February, a drop that reflects in part the growing concern of a worldwide recession that will hit demand for crude.
said in a statement, citing it as one example of recent “encouraging economic developments.”
Understand the Decline in U.S. Gas Prices
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Understand the Decline in U.S. Gas Prices
Demand is pushing prices down. As gas prices rose, people adjusted their driving habits to accommodate prices, which reached an all-time high in June. Fewer drivers on the road has made gasoline more affordable, and some states have also suspended taxes on gasoline to bring prices down.
Understand the Decline in U.S. Gas Prices
Oil prices have fallen. Just two months ago, oil prices, which are tied to gas prices, surpassed $120 a barrel, helping to push the national average price of gasoline to about $5 a gallon. But prices have steadily decreased with increased oil production, helping to bring gas prices down and easing broader recession fears.
Understand the Decline in U.S. Gas Prices
Gas prices vary. Despite the overall decline, the cost of gas can vary considerably at the state level. In California, regulations to limit pollution make driving more expensive, so gas prices will be higher than in a state like Georgia, which has lower gas taxes.
Understand the Decline in U.S. Gas Prices
A political boost for Joe Biden. The cheaper prices are a political win for President Biden, especially as falling fuel costs have brought down overall inflation. But experts are unsure that the low prices will last, as oil prices are volatile and determined by myriad forces, many of which are hard to predict.
For consumers, falling gas prices offer a respite from a shaky economy, rapid inflation and other worries. “We have new rising diseases and inflation, and people expect a recession,” said Zindy Contreras, a student and part-time waitress in Los Angeles. “If I just had to not worry about my gas tank taking up $70, that’d be a huge relief, for once.”
Ms. Contreras has been filling up her 2008 Mazda 3 only halfway as a result of the higher prices, costing her $25 to $30 each visit to the pump, and she had found opportunities to car-pool with friends. These days, Ms. Contreras usually gets gas twice a week, driving 15 miles to and from work each week and an additional 10 to 50 miles a week, depending on her plans.
The national average price masks wide regional variations. Prices vary according to the health of local economies, proximity to refineries and state taxes, said Devin Gladden, a spokesman with AAA.
weaker demand because of high costs, a sharp decline in global oil prices in recent months and the suspension of taxes on gasoline in a handful of states.
Nearly two-thirds of people in a recent AAA survey said they had altered their driving habits because of high prices, mostly by taking fewer trips and combining errands. On Thursday, the Organization of the Petroleum Exporting Countries revised down its forecast for global oil demand this year.
Regardless of the causes, the lower prices are a welcome change for drivers for whom the added expense — often $10 to $15 extra for a tank of gas — had become yet another hurdle as they sought to get their lives back to normal as the coronavirus pandemic eased.
“The affordability squeeze is becoming very real when you see these high prices at the gas pump,” said Beth Ann Bovino, the U.S. chief economist at S&P Global. “So, in that sense, it’s a positive sign certainly for those folks that are struggling.”
Read More About Oil and Gas Prices
That cushion — cash not spent on gasoline that can go elsewhere — also extends to businesses, particularly as the price of diesel fuel drops. Diesel, which is used to fuel, for instance, farm equipment, construction machinery and long-haul trucks, has also fallen from a June record, though at a slower pace than gasoline prices.
The drop in the price of gas is also good news for the economy, as businesses face less pressure to pass energy costs on to their customers — a move that would add to the country’s inflation problem.
hurricanes later this year could damage Gulf Coast refineries and pipelines, choking off supplies.
For now, though, the steady drop in the cost of fuel offers Americans a reprieve.
“If gasoline prices stay at or near the levels they have reached, that would mean much more cushion for households,” Ms. Bovino said.
Gabe Tucker, 26, is a lawyer with Fortif Law Partners in Birmingham, Ala., where the share of job listings that permit remote work is roughly half that of New York’s. Each morning, Mr. Tucker puts on a button-down shirt, drives for 15 minutes and arrives at the office around 8. His routine, in other words, remains identical to the one he had before the pandemic (with the exception of no longer having to wear a tie). In the evenings, he and his colleagues sometimes make a toast to celebrate the closing of a deal. They’ve been back in the office since June 2020, with masks and other Covid precautions.
“It’s work like normal, pretty much,” Mr. Tucker said. “We found it difficult to be working remotely. We all enjoy being around each other.”
San Francisco’s office occupancy is at 39 percent of its prepandemic level, and New York’s is at 41 percent, according to data from the building security firm Kastle. Austin, Texas, meanwhile, is at nearly 60 percent. Then there’s the Huntington Center, a 37-story office tower in downtown Columbus, which now has about 85 percent of its prepandemic occupants on site at some point during the week, according to Hines, the company that manages the building.
Traci Martinez, the office managing partner at Squire Patton Boggs, a law firm with offices on the 20th floor of the Huntington Center, said somebody coming from San Francisco might walk into her office and marvel at the buzz.
“They would come into our building and be like, ‘Wow, this is just normal,’” said Ms. Martinez, 45.
She has a front-row view of the disparities in office returns nationwide. She coordinates with managers in the firm’s numerous offices, and has found that its Ohio locations have filled up faster than many others, particularly its Washington, D.C., location.
KYIV — When Ihor Sumliennyi, a young environmental activist, arrived at the site of a recent missile strike, the rubble had barely stopped smoking.
Police officers guarded the street. People who had lived in the smashed apartment building stared in disbelief, some making the sign of the cross next to him. He started poking around.
And then, bam! His eyes lit up. Right in front of him, lying near the sidewalk, was exactly what he was looking for: a mangled chunk of shrapnel, a piece of the actual Russian cruise missile that had slammed into the building.
Serhii Petrov, a well-known artist working in Lviv. He’s now incorporating spent bullet cartridges into the masks he makes.
As he handled one, he mused, “Maybe it was someone’s last bullet.”
At a charity auction in Lviv on Sunday, Valentyn Lapotkov, a computer programmer, paid more than $500 for an empty missile tube that had been used, the auctioneers said, to blow up a Russian armored personnel carrier. He said that when he touched it he felt “close to our heroes.”
Memorializing the war, even when it’s likely far from over, is a way to show solidarity with the soldiers and those who have suffered. One of Kyiv’s biggest museums recently staged an exhibition of war artifacts collected since the Russians invaded in February. The rooms are full of gas masks, missile tubes and charred debris. The message is clear: See, this is what real war really looks like.
Fridays for Future movement, organizing social media campaigns against fossil fuels, and during the hundreds of video calls he makes, he shows off his war trophies. He also sends some out of the country with female activists to “go on tour” (he can’t travel himself, because of Ukraine’s ban on military-age men leaving the country).
Dominika Lasota, a climate justice activist from Warsaw. “I automatically started to laugh at it, in shock, but then realized how dystopian this moment was.”
“Ihor seemed to be all chill about it,” she added of Mr. Sumliennyi. “He actually showed that piece of the bomb with pride — he was smiling.”
UAID foundation, a volunteer network that, among the many things it’s doing, has sold more than 15 pieces of war debris, including several missile and rocket tubes used by the Ukrainian military that are big hits. All told, the war debris has netted more than $4,000, which the foundation spends on protective vests, medicine and other supplies for Ukrainian troops.
“We are taking things used to kill people to now save lives,” she said.
She said that one young Ukrainian soldier fighting in the Donbas region has been a huge help in finding things from the front lines. He has jumped out of trenches even as Russian shells were exploding around him and fellow soldiers were yelling at him to take cover. But, she said, he’s close to a bunch of volunteers and yells back, “I have to go. My friends need this stuff!”
Bucha, a Kyiv suburb where Russian troops slaughtered hundreds of civilians, to take photos for a social media campaign about the connection between fossil fuels and Russia’s war machine.
Just by chance, they stumbled into a backyard where they found a Russian military jacket and the pair of black boots (size 10). They remain among his prized items.
“We didn’t go to Bucha looking for this,” he said. “We just got lucky.”
Diego Ibarra Sanchez contributed reporting from Lviv and Oleksandra Mykolyshyn from Kyiv.
Chinese artists have staged performances to highlight the ubiquity of surveillance cameras. Privacy activists have filed lawsuits against the collection of facial recognition data. Ordinary citizens and establishment intellectuals alike have pushed back against the abuse of Covid tracking apps by the authorities to curb protests. Internet users have shared tips on how to evade digital monitoring.
As China builds up its vast surveillance and security apparatus, it is running up against growing public unease about the lack of safeguards to prevent the theft or misuse of personal data. The ruling Communist Party is keenly aware of the cost to its credibility of any major security lapses: Last week, it moved systematically to squelch news about what was probably the largest known breach of a Chinese government computer system, involving the personal information of as many as one billion citizens.
The breach dealt a blow to Beijing, exposing the risks of its expansive efforts to vacuum up enormous amounts of digital and biological information on the daily activities and social connections of its people from social media posts, biometric data, phone records and surveillance videos. The government says these efforts are necessary for public safety: to limit the spread of Covid, for instance, or to catch criminals. But its failure to protect the data exposes citizens to problems like fraud and extortion, and threatens to erode people’s willingness to comply with surveillance.
for mishandling data. But the authorities rarely point fingers at the country’s other top collector of personal information: the government itself.
Security researchers say the leaked database, apparently used by the police in Shanghai, had been left online and unsecured for months. It was exposed after an anonymous user posted in an online forum offering to sell the vast trove of data for 10 Bitcoin, or about $200,000. The New York Times confirmed parts of a sample of the database released by the anonymous user, who posted under the name ChinaDan.
In addition to basic information like names, addresses and ID numbers, the sample featured details that appeared to be drawn from external databases, like instructions for couriers on where to drop off deliveries, raising questions about how much information private companies share with the authorities. Of particular concern for many, it also contained intensely personal information, such as police reports that included the names of people accused of rape and domestic violence, as well as private information about political dissidents.
leaked databases used by the police in China that were left online with little to no protection; some contained facial recognition records and ID scans of people in a Muslim ethnic minority region.
Now, there are signs that people are growing wary of the government and public institutions, too, as they see how their own data is being used against them. Last month, a nationwide outcry erupted over the apparent abuse of Covid-19 tracking technology by local authorities.
The Latest on China: Key Things to Know
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China’s economy stumbles. Hurt by lockdowns imposed to curb the spread of Covid, China’s economic engine has shuddered in recent months, as housing sales sagged, shops and restaurants shuttered and youth unemployment climbed. The slowdown has kindled doubts about the viability of the country’s stringent strategy of eliminating virtually all Covid-19 infections.
A financial scandal. Depositors from across the country descended on the city of Zhengzhou for a rare mass demonstration after the money they placed in rural banks using online, third-party platforms was frozen as investigators examined allegations of widespread fraud. The authorities responded with violence.
Forced labor. Mining companies in China’s western Xinjiang region are assuming a larger role in the supply chain behind the batteries that power electric vehicles and store renewable energy. But their ties to forced labor practices could portend trouble for industries that depend on materials from China.
Protesters fighting to recover their savings from four rural banks in the central Chinese city of Zhengzhou found that the mobile apps used to identify and isolate people who might be spreading Covid had turned from green — meaning safe — to red, a designation that would prevent them from moving freely.
“There is no privacy in China,” said Silvia Si, 30, a protester whose health code had turned red. The authorities in Zhengzhou, under pressure to account for the episode, later punished five officials for changing the codes of more than 1,300 customers.
posted on Weibo that he was refusing to wear an electronic bracelet to track his movements while in isolation, saying the device was an “electronic shackle” and an infringement on his privacy. The post was liked around 60,000 times, and users flooded it with responses. Many said the bracelet reminded them of the treatment of criminals; others called it a ploy to surreptitiously collect personal information. The post was later taken down by censors, the blogger said.
researcher on technology policy at Yale Law School and New America. “People are far more trusting overall in how government entities handle their personal information and far more suspicious about the corporate sector.”
Legal analysts said any disciplinary actions resulting from the Shanghai police database breach were unlikely to be publicized. There are few mechanisms in place to hold Chinese government agencies responsible for their own data leaks. For many citizens, that lack of recourse has contributed to a sense of resignation.
Occasionally, though, they notch small victories, as Xu Peilin did when she took on her neighborhood committee last year. She had returned to her apartment building in Beijing one day to find that the compound wanted residents to submit to a facial recognition scanner to enter.
“It was insane,” said Ms. Xu, 37, a project manager at a start-up company. She said it reminded her of one of her favorite television shows, the British science fiction series “Black Mirror.”
Ms. Xu badgered her neighborhood committee by telephone and text message until it relented. For now, Ms. Xu said, she can still enter her compound using her key card, though she believed it was only a matter of time until the facial recognition devices became mandatory again.
“All I can do for now,” she said, “is continue to resist on a small scale.”
Protests continued in Colombo, Sri Lanka, following news that President Gotabaya Rajapaksa had fled to the Maldives. Crowds took to the streets and moved toward the presidential residence.CreditCredit…Atul Loke for The New York Times
COLOMBO, Sri Lanka — As a swelling crowd demanded that Prime Minister Ranil Wickremesinghe step down and protesters breached the gate of his office on Wednesday, security forces fired tear gas and a military helicopter circled overhead.
Earlier, as protesters marched near the prime minister’s office, security forces had tried to disperse the throngs with tear gas, but they would not budge and converged with another group. Riot police officers, many wearing gas masks and holding rifles, stood nearby air force and army forces without engaging with the crowd.
“We don’t want the robber Ranil, the bank thief, the deal thief!” the crowd chanted.
Hundreds of marchers had set off from the president’s office in the morning, including families with young children. Their numbers had been reinforced overnight by crowds arriving in the capital, Colombo, from across Sri Lanka.
As the day began outside the president’s office, the atmosphere was generally peaceful, with an air of celebration. People were digesting the news that President Gotabaya Rajapaksa had fled to neighboring Maldives.
“The thieves are running away,” said Sanjayra Perera, a university librarian who was among the thousands who had traveled to Colombo. She had brought her two children, 12 and 10, on Wednesday morning by train from the western city of Gampaha.
She said she wanted her family to be in the capital when the Rajapaksa family dynasty fell.
“This is our country,” she said. “We win.”
The crowd found patches of shade under statues, sat on the wall of an oceanfront park and waited in line, holding umbrellas to block the sun, for a chance to see the historic office building, one of three government buildings that protesters had taken over this past weekend.
Despite the uncertainty over whether Mr. Rajapaksa would resign on Wednesday, as the speaker of Parliament has said he would, and who might replace him, protesters were jubilant with the confidence that the end of an era was near.
“This is a historical day for us,” said Randika Sandaruwan, 26, who took the train on Tuesday night with nine friends from the nearby city of Negombo. “We needed to kick out our president, and now Gota is gone,” he said, using a nickname for the president.
Mr. Sandaruwan and his friends, like many protesters, had nothing to protect them from the tear gas.
Shameen Opanayake, 22, sat on the front steps with his mother and two sisters. They had taken an early bus from their home in Kalutara, south of the capital.
“If he doesn’t step down today,” he said, referring to the president, “I don’t think so that this place will remain calm. The whole country is rejecting him.”
Prime Minister’s party only just approves him in confidence vote
Conservative Party rebellion means he has much work to do
Johnson looking vulnerable to further threats
LONDON, June 6 (Reuters) – For a man who long set his sights on becoming Britain’s prime minister, Boris Johnson came dangerously close on Monday to being ousted by lawmakers tired of defending him and faces a battle to win back the confidence of his party and country.
He survives, just, for now. But he is deeply wounded and even loyal lawmakers who backed him in a confidence vote say he must now change – return to the traditional ideals of the governing Conservative Party, foster unity and lead.
His inbox is daunting. British households face the biggest cost-of-living squeeze since the 1950s, with food and fuel prices rising while wages lag, and travellers are experiencing transport chaos at airports caused by staffing shortages.
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The master of political comebacks might struggle this time.
Ed Costelloe, chair of the group Conservative Grassroots who backed Johnson in 2019, said he had got many things right, but had been brought down by the so-called “partygate” scandal over his breaches of COVID-19 lockdown rules. read more
“Once you face a vote of confidence somehow you are doomed. After that, the vultures start gathering. I think he is in real, real trouble,” he told Reuters.
Johnson won the vote 211 to 148, a worse showing than when lawmakers tried to oust his predecessor Theresa May, who won her vote but then resigned six months later. read more
The confidence vote was a brutal wake up call for a leader whose mandate once seemed unassailable after his promise to “get Brexit done” in 2019 won over voters in parts of the country the Conservatives had never been able to capture and the party’s biggest majority in over three decades.
Since then, the list of reasons lawmakers gave for wanting Johnson gone were as varied as they are many, cutting across usual factional lines and making the rebels somewhat uneasy bedfellows.
As reasons why the 57-year-old leader should resign, lawmakers cite anything from “partygate”, threats to breaking international law, the defence of rule-breakers at the heart of power, multiple policy U-turns, an initial slow response to COVID-19 to a general lack of respect for his office.
It was perhaps the lack of cohesion in Monday’s rebellion that helped save him. But it has left him weakened.
SURVIVOR
British Prime Minister Boris Johnson visits St Mary Cray Primary Academy School to see how they are delivering tutoring to help children catch up following the coronavirus disease (COVID-19) pandemic, in Orpington, Britain May 23, 2022. Stefan Rousseau/Pool via REUTERS
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Political survival is something Johnson, known widely as Boris, has made a career of, with former prime minister David Cameron likening him to a “greased piglet” who is hard to catch.
“My friends, as I have discovered myself, there are no disasters, only opportunities. And indeed, opportunities for fresh disasters,” Johnson wrote in a newspaper column in 2004.
In a speech to the party lawmakers just hours before the vote, Johnson remained adamant he could win again.
“If you don’t believe that we can come back from our current position and win again then you haven’t looked at my own record or the record of this party,” he said, according to a senior party source in the meeting.
Some have warned of underestimating Johnson, or Alexander Boris de Pfeffel Johnson, saying his ruffled appearance and distinctive mop of blond hair masks the discipline and ruthlessness he needed to get to this point.
But after years of weathering sex scandals, gaffes and missteps as London mayor, foreign secretary and now prime minister, Johnson, a relative loner in the Conservative party, might be running out of road.
For some in the party the rot set in when he defended his former adviser Dominic Cummings when he broke COVID-19 rules early in the pandemic, enraging the country.
The following year he initially defended a Conservative lawmaker who had been found guilty of breaching lobbying rules and a U-turn on extending free school meals to children from low-income families did little to improve the picture.
The final straw was months of a steady drip of stories about lockdown-breaking parties in Johnson’s Downing Street culminating in a report last month detailing fights and alcohol-induced vomit in the early house at times when the rest of the country was obeying strict COVID-19 rules.
One former Conservative lawmaker was so incensed even before the report, they “crossed the floor” or went to join the main opposition Labour Party.
“Prior to leaving … it was just embarrassing being asked to defend the indefensible for a PM who clearly has no morals,” Christian Wakeford, who joined Labour in January, told Reuters.
Conservative Grassroots chair Costelloe said the decision could be fatal in the long-term: “I am firmly of the view if he is still there in two years then we will lose the next election.”
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Reporting by Elizabeth Piper; editing by Grant McCool
Our Standards: The Thomson Reuters Trust Principles.
TOKYO — Last December, after two years of stop-and-go growth, Japan’s economic engine seemed like it might finally be revving up. Covid cases were practically nonexistent. Consumers were back on the town, shopping, eating out, traveling. The year 2021 ended on a high note, with the country’s economy expanding on an annual basis for the first time in three years.
But the Omicron variant of the coronavirus, geopolitical turmoil and supply chain snarls have once again set back Japan’s fragile economic recovery. In the first three months of the year, the country’s economy, the world’s third largest after the United States and China, shrank at an annualized rate of 1 percent, government data showed on Wednesday.
A combination of factors contributed to the decline in growth. In January, Japan had put into place new emergency measures as coronavirus case numbers, driven up by Omicron, moved toward the highest levels of the pandemic. In February, Russia invaded Ukraine, spiking energy prices. And that was before China, Japan’s largest export market and a key supplier of parts and labor to its manufacturers, imposed new lockdowns in Shanghai, throwing supply chains into chaos.
The contraction has not been as “extreme” as previous economic setbacks thanks to high levels of vaccine uptake and less wide-ranging emergency measures than during previous waves of the coronavirus, according to Shinichiro Kobayashi, principal economist at the Mitsubishi UFJ Research Institute.
traced to the outbreak of Covid-19, which triggered an economic slowdown, mass layoffs and a halt to production. Here’s what happened next:
A reduction in shipping. With fewer goods being made and fewer people with paychecks to spend at the start of the pandemic, manufacturers and shipping companies assumed that demand would drop sharply. But that proved to be a mistake, as demand for some items would surge.
Demand for protective gear spiked. In early 2020, the entire planet suddenly needed surgical masks and gowns. Most of these goods were made in China. As Chinese factories ramped up production, cargo vessels began delivering gear around the globe.
Then, a shipping container shortage. Shipping containers piled up in many parts of the world after they were emptied. The result was a shortage of containers in the one country that needed them the most: China, where factories would begin pumping out goods in record volumes.
Demand for durable goods increased. The pandemic shifted Americans’ spending from eating out and attending events to office furniture, electronics and kitchen appliances – mostly purchased online. The spending was also encouraged by government stimulus programs.
Strained supply chains. Factory goods swiftly overwhelmed U.S. ports. Swelling orders further outstripped the availability of shipping containers, and the cost of shipping a container from Shanghai to Los Angeles skyrocketed tenfold.
Consumer spending “will recover from the downward pressure, but because there are these negative factors, the question is how broad will that recovery be?” said Yoshiki Shinke, a senior economist at Dai-ichi Life Research Institute.
Japan’s prime minister, Fumio Kishida, has tried to offset the effects of price increases with large government subsidies for fuel and cash handouts for families with children. But Japanese consumers, wary of the pandemic’s economic effects, have largely been putting rounds of stimulus money into savings.
Japan’s growth is facing diverse challenges, but ultimately its recovery will depend on Covid, analysts said, a common refrain over the last two years.
While Japan has high vaccination rates and has performed better than most other wealthy countries at keeping the pandemic in check, the virus’s protean nature has made it difficult to predict its path. And that has made experts hesitant to commit to any forecasts about its future impact on global economies.
“The big risk is that corona starts to spread again,” said Naoyuki Shiraishi, an economist at the Japan Research Institute. “If a new variant appears, there will be new restrictions on activity, and that will suppress consumption.”
Women wearing protective masks walk in a shopping district, amid the coronavirus disease (COVID-19) pandemic, in Tokyo, Japan, February 15, 2022. REUTERS/Kim Kyung-Hoon
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TOKYO, April 27 (Reuters) – The advisers to Japanese Prime Minister Fumio Kishida’s top panel urged the government on Wednesday to prevent the current account surplus from shrinking further so as to avoid affecting the currency market.
Japan has long boasted of a hefty current account surplus, a source of confidence in its safe-haven yen, but surging fuel import costs and slowing exports amid the Ukraine crisis are creating a trade deficit, hurting Japan’s balance of payments.
Japan’s shrinking current account surplus helped push the yen to a two-decade low beyond 129 yen earlier this month. It traded around 128 yen to the dollar since then.
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“Persistent declines in current account surplus could impact on financial and currency markets,” the four private-sector advisers at the Council on Economic and Fiscal Policy said.
The 11-member top advisory panel is comprised of ministers, lawmakers and the Bank of Japan Governor Haruhiko Kuroda.
“We must build an economic structure that is resilient to external shocks,” the advisers said in a proposal presented at a meeting of the panel.
The advisers also called for steps including decarbonisation efforts, such as restarting nuclear reactors early and saving energy, exporting agricultural produce and promoting inbound tourists to try to improve the current account balance.
“We must resume entry aimed for tourism in stages in order to help foreign tourists recover from the plunge” caused by the COVID-19 pandemic,” the advisers said.
Japan’s tourism industry has been calling on the government to reopen borders to more visiting tourists, who served as a rare bright spot for the world’s third largest economy until the COVID-19 outbreak over two years ago.
Japan has recently eased entry curbs on business travellers and students as it lifted the daily cap for international arrivals, after it was criticised for strict border measures.
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Reporting by Tetsushi Kajimoto, Editing by William Maclean
Our Standards: The Thomson Reuters Trust Principles.
In a world contending with no end of economic troubles, a fresh source of concern now looms: the prospect of a confrontation between union dockworkers and their employers at some of the most critical ports on earth.
The potential conflict centers on negotiations over a new contract for more than 22,000 union workers employed at 29 ports along the West Coast of the United States. Nearly three-fourths work at the twin ports of Long Beach and Los Angeles, the primary gateway for goods shipped to the United States from Asia, and a locus of problems afflicting the global supply chain.
The contract for the International Longshore and Warehouse Union expires at the end of June. For those whose livelihoods are tied to ports — truckers, logistics companies, retailers — July 1 marks the beginning of a period of grave uncertainty.
A labor impasse could worsen the floating traffic jams that have kept dozens of ships waiting in the Pacific before they can pull up to the docks. That could aggravate shortages and send already high prices for consumer goods soaring.
impacts of Russia’s invasion of Ukraine and as China imposes new Covid restrictions on industry.
Understand the Supply Chain Crisis
The dockworkers have moved unprecedented volumes of cargo during the pandemic, even as at least two dozen succumbed to Covid-19, according to the union. They are aware that many of the shipping terminals in Southern California are controlled by global carriers that have been racking up record profits while sharply increasing cargo rates — a fact cited by President Biden in his recent State of the Union address as he promised a “crackdown” to alleviate inflation.
With ports now capturing attention in Washington, some within the shipping industry express confidence that negotiations will yield a deal absent a disruptive slowdown or strike.
“There’s too much at stake for both sides,” Mario Cordero, executive director of the Port of Long Beach, said during a recent interview in his office overlooking towering cranes and stacks of containers. “There’s an incentive because the nation is watching.”
Savannah, Ga.
“If they don’t come to a compromise, then freight will get permanently diverted to the East Coast,” Mr. Matinifar said.
Animating contract talks is the popular notion that the longshoremen are a privileged class within the supply chain, using the union to protect their ranks — a source of resentment among other workers.
“They treat us like we’re nobodies,” said Mr. Chilton, the truck driver. “The way they talk to us, they’re very rude.”
traced to the outbreak of Covid-19, which triggered an economic slowdown, mass layoffs and a halt to production. Here’s what happened next:
A reduction in shipping. With fewer goods being made and fewer people with paychecks to spend at the start of the pandemic, manufacturers and shipping companies assumed that demand would drop sharply. But that proved to be a mistake, as demand for some items would surge.
Demand for protective gear spiked. In early 2020, the entire planet suddenly needed surgical masks and gowns. Most of these goods were made in China. As Chinese factories ramped up production, cargo vessels began delivering gear around the globe.
Then, a shipping container shortage. Shipping containers piled up in many parts of the world after they were emptied. The result was a shortage of containers in the one country that needed them the most: China, where factories would begin pumping out goods in record volumes.
Demand for durable goods increased. The pandemic shifted Americans’ spending from eating out and attending events to office furniture, electronics and kitchen appliances – mostly purchased online. The spending was also encouraged by government stimulus programs.
Strained supply chains. Factory goods swiftly overwhelmed U.S. ports. Swelling orders further outstripped the availability of shipping containers, and the cost of shipping a container from Shanghai to Los Angeles skyrocketed tenfold.
Union officials declined to discuss their objectives for a new contract.
Mr. McKenna, the maritime association chief executive, said the union had yet to outline demands while declining to engage in discussions before May.
He expected that the union would resist efforts to expand automation at the ports, a traditional point of contention. He said greater automation — such as adding self-driving vehicles and robotics to move cargo — was unavoidable in ports in dense urban places like Los Angeles. There, land is tight, so growth must come from increasing efficiency, rather than physically expanding.
The last time the I.L.W.U. contract expired, West Coast ports suffered months of debilitating disruptions — the source of enduring recriminations.
Terminal operators accused dockworkers of slowing operations to generate pressure for a deal. The union countered that employers were the ones creating problems.
Some dockworkers question whether terminal owners are sincerely seeking to speed up cargo handling, given that shipping rates have soared amid chaos at the ports.
Jaime Hipsher, 45, drives a so-called utility tractor rig — equipment used to move containers — at a pair of Southern California shipping terminals. One is operated by A.P. Moller-Maersk, a Danish conglomerate whose profits nearly tripled last year, reaching $24 billion.
She said maintenance of equipment was spotty, producing frequent breakdowns, while the terminals were often understaffed — two problems that could be fixed with more spending.
A Maersk spokesman, Tom Boyd, rejected that characterization.
“Freight rates have been impacted by the global Covid-19 recovery and the demand outpacing supply,” he said in an emailed statement. “Ships at anchor are not productive, nor are they earning revenue against a backdrop of large fixed costs.”
That Ms. Hipsher spends her nights on the docks represents an unexpected turn in her life.
Her father was a longshoreman. He urged her to attend college and do something that involved wearing business attire, in contrast to how he spent his working hours — climbing a skinny ladder to the top of ships and loading coal onto vessels.
“He would come home after work and he would have coal dust coming out of his ears, out of his nose,” Ms. Hipsher recalled. “His hands would just be completely black.”
But in 2004, when she was working as a hairstylist, her brother — also a longshoreman — suggested that she enter a lottery for the right to become a casual dockworker.
The ports had changed, her brother said. Growing numbers of women were employed.
Eighteen years later, Ms. Hipsher has gained the security of seniority, health benefits and a pension.
As contract talks approach, she pushes back against the notion that the union poses a threat to the global economy.
“You’re complaining about my wages, thinking that my wages are the source of inflation, and we don’t deserve it,” she said. “Well, look at the billions that the owners are making.”
Wall Street has been quick to shift its Covid-19 protocols after New York State dropped its indoor mask mandate last month. At JPMorgan Chase, masks are now voluntary for vaccinated and unvaccinated employees, and the firm will discontinue mandatory Covid testing as well as the reporting of Covid infections by April 4. At Morgan Stanley, where vaccines are required to enter the office, the mask requirement was dropped early last month.
Goldman Sachs dropped mask requirements on Feb. 14, though it still requires testing. Citigroup dropped its mask requirement last week. Wells Fargo has maintained more rigid Covid protocols than some of its finance peers, requiring unvaccinated employees to wear a mask at all times unless they are eating, drinking or alone in an enclosed room.
Other industries that have made a push for in-person work, such as real estate, have also reformulated their Covid guidelines in recent weeks. BlackRock, which has asked its 7,600 U.S. employees to return to the office at least three days a week, no longer requires masks in its U.S. offices, though employees have to be vaccinated to enter the building and are asked to test twice a week. Prologis, a logistics real estate firm, said its office mask guidelines were consistent with local regulations. Guardian Life Insurance, which has about 6,300 U.S. employees, does not have an in-office mask requirement in most areas of the country.
Still, some tech companies are holding firm on Covid safety protocols. Google requires any unvaccinated employees with approval to enter its offices to test regularly and wear a mask. Meta, the parent company of Facebook, requires anyone entering the office to be vaccinated — including with a booster starting March 28 — and follows local guidelines on masking.
Intuit announced on Wednesday that starting on May 16, its 11,500 U.S. employees would return to the office in a hybrid model, in which teams determine how many days per week workers should be in person. While the company requires anyone entering its offices to be vaccinated, it follows local and state guidelines on masking, meaning masks are not required in any of its U.S. offices.
“We’ve tried to stress that people should feel comfortable doing whatever feels best for them,” said Chris Glennon, Intuit’s vice president of global real estate and workplace. “We are seeing some folks masking, particularly in public areas, but by and large most are not masking.”
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