Longshore workers who have closed 36 ports from Maine to Texas will cost the U.S. economy billions of dollars and cause goods shortages and price increases within days, experts warn.
The strike, which began on Monday night, will first affect imports of perishable products such as bananas, and then avocados, pineapples and fruit juices.
Beer, wine and spirits will also face challenges due to their perishable nature.
If the strike lasts more than a few weeks, a work stoppage could lead to higher prices and delays for a wide range of products reaching homes and businesses.
Some products could arrive late for the peak holiday shopping season, which could affect delivery of anything from toys and artificial Christmas trees to cars, coffee and fruit.
The International Longshoremen’s Association is demanding a pay rise of around 77 percent over six years for its 45,000 striking members. For union members at a typical rate, their salary would go from $81,120 to about $143,520.
Longshore workers at ports from Maine to Texas began picketing early Tuesday in a strike over wages and automation that could reignite inflation and lead to product shortages.
Experts say banyan trees will be hardest hit by the attacks, along with other fresh fruits from South America and the Caribbean.
Brian Pacula, West Monroe supply chain partner, noted that bananas are the product that will be most affected by the current disruptions.
Ports affected by the strike handle 3.8 million metric tons of bananas each year, or 75 percent of the national supply, according to the American Farm Bureau Federation.
Jason Miller, a professor of supply chain management at Michigan State University, identified other perishable products at risk, including dates, figs, pineapples, avocados and more than 80 percent of fruit juices.
Jefferies analysts say European manufacturers will be hit harder than their Asian counterparts.
In particular, European toy makers such as Playmobil and Lego rely predominantly on eastern US ports. Rivals like Jakks and Funko matter across the West Coast.
The strike will also create traffic jams at West Coast ports, where workers are represented by a different union.
Railroads say they can increase their capacity to transport more freight from the West Coast, but analysts say they can’t move enough to compensate for the closed ports in the east.
JP Morgan estimated that a strike closing East and Gulf Coast ports could cost the economy between $3.8 billion and $4.5 billion per day, with some of that amount recovered over time after normal operations resume. .
Retailers, auto parts suppliers and agricultural importers were hoping for a deal or for President Joe Biden intervene and end the strike using the Taft-Hartley Act, which allows you to request an 80-day cooling-off period.
But during a Sunday exchange with reporters, Biden, who has worked to win union votes for Democrats, said “no” when asked if he planned to intervene in the potential work stoppage.
In an update Tuesday morning, the White House maintained that administration officials were working “around the clock” to help negotiations move forward, including being in direct contact with both USMX and the ILA. Biden and Vice President Kamala Harris were also “closely monitoring” potential impacts to the supply chain, the White House added, recruiting a task force to meet daily and prepare for any disruptions.
Retail expert Neil Saunders of Global Data told DailyMail.om that the strike will cause two main problems: shoppers will face higher prices and empty shelves.
He said: ‘Firstly, it will increase costs for retailers and therefore prices for consumers.
‘Secondly, it could lead to shortages of some products if retailers’ stock gets stuck in the supply chain. Unfortunately, the strike comes at the busiest time of year for retail, a time when there isn’t much slack in the system.
‘Many retailers have made plans to mitigate strikes, including diverting products to West Coast ports and using air freight.
‘However, retailers cannot do this for all products and using these options still costs them more money, so it is only a partial solution at best.
“Basically, the country is highly dependent on the proper functioning of ports and disruptions will have a very high economic cost.”
“First, we can expect delays in marketing,” said Mark Baxa, president of the Council of Supply Chain Management Professionals.
The International Longshoremen’s Association is demanding a wage increase of around 77 percent over six years.
They also want a complete ban on the automation of cranes, doors and trucks to move containers used in loading or unloading goods at 36 US ports.
The contract expires Tuesday between the International Longshoremen’s Association and the United States Maritime Alliance, which represents ports.
FILE – Containers move at the Port of New York and New Jersey in Elizabeth, New Jersey, June 30, 2021. (AP Photo/Seth Wenig, File)
Midnight longshoremen strike at the Bayport terminal on Tuesday, October 1, 2024 in Houston. (AP Photo/Annie Mulligan)
Philadelphia longshoremen gathered outside the Packer Avenue Marine Terminal port begin striking as their contract expires at midnight Tuesday, Oct. 1, 2024. (AP Photo/Ryan Collerd)
The two sides have not held negotiations since June. A strike by ILA workers would be the union’s first since 1977.
While any port can handle any type of goods, some ports are specialized in handling goods for a particular industry.
Ports that would be affected by the closure include
- Baltimore and Brunswick, Georgia, the two busiest automobile ports
- Philadelphia, which prioritizes fruits and vegetables
- New Orleans, which handles coffee, primarily from South America and Southeast Asia, various chemicals from Mexico and northern Europe, and wood products such as plywood from Asia and South America.
Other major ports affected include Boston; New York/New Jersey; Norfolk, Virginia; Wilmington, North Carolina; Charleston, South Carolina; Savannah, Georgia; Tampa, FL; Mobile, Alabama; and Houston.
Retailers representing about half of all container shipping volume have been actively implementing backup plans as they approach their important holiday sales season.
Many of the big players rushed to ship Halloween and Christmas products early to avoid strike-related disruptions, incurring additional costs to ship and store those products.
Retail giant Walmart, the largest U.S. container shipper and warehouse club operator Costco say they are doing everything they can to mitigate any impact.