Dockworkers strike threatens to reignite food inflation, spark holiday shortages for US consumers
A dockworkers strike that has idled more than a dozen of the largest ports across the Eastern US threatens to reignite food inflation in the coming weeks, and could create a shortage of toys and Christmas trees just as the holiday season gets underway.
Some 45,000 members of the International Longshoremen’s Association walked off the job on Tuesday – picketing at ports stretching from Maine to Texas as workers and management remain at loggerheads over issues like wages and the threat of automation.
The most immediate impact may be felt at supermarkets, according to experts.
“From a consumer standpoint if the strike goes a couple of weeks, you’ll start to see impacts on the grocery side,” Larry Gross, a supply chain analyst and president of Gross Transportation Consulting, told The Post.
Nearly four in five of dates, figs, pineapples and avocados that are imported to the US come into the East Coast ports that are on strike, according to Michigan State University associated professor Jason Miller, an expert in supply chain management.
Three out of four bananas imported to the US and 81% of the coffee brought into the country is processed through East Coast ports as well.
A lengthy labor stoppage threatens to disrupt the holiday shopping season for millions of Americans, who could see shortages of toys, cars, furniture, alcohol and pharmaceuticals.
The strike threatens to impact numerous industries and disrupt global supply chains on a scale similar to that which was seen during the coronavirus pandemic.
“No industry is completely safe from the impact of an ILA work stoppage, but some would be hit harder than others,” Ryan Petersen, CEO and founder of US freight forwarder Flexport, told ShippingWatch.
While a one-week strike would cause a backlog of up to six weeks, a longer strike could have more dire effects, according to Petersen.
“In a worst-case scenario — if a strike goes on for weeks — the result would be catastrophic, causing supply chain disruptions similar to what we experienced during Covid,” he said.
To prepare for the worst, retailers stocked up on goods in hopes that the strike won’t last long enough to cause serious damage.
“We have become hyper sensitive to anything that will affect global trade and importation of our products,” Jay Foreman, the CEO of toy manufacturer Basic Fun, told The Post. “We knew this day was coming.”
Foreman, whose company makes Tonka trucks, Care Bears, Lincoln Logs and Lite Brite and then ships the goods from its warehouse in China, said that he had his containers redirected to the West Coast six months ago.
“Typically 35% of all our shipments come to the East Coast,” Foreman told The Post. “We diverted everything whether it cost us a bit more in cash and the use of capital and time. We decided not to take any chances.”
“We quoted our prices 10 months ago to the retailers and typically our customers …like Walmart… aren’t willing to take increases in the middle of the cycle…” he said.
But Foreman warned that costs would eventually be passed on to shoppers if the labor stoppage drags on for weeks.
The Auto Care Association, which represents the automotive aftermarket industry, said that the strike threatens to exact losses of nearly $340 million per day for the auto parts industry.
“Each day that this strike continues, not only does our industry lose out on hundreds of millions of dollars in business, but the nearly 300 million Americans who drive are more at risk on the road as access to service and repair of their vehicles diminishes,” said Bill Hanvey, president and CEO of the Auto Care Association.
Maersk, the Denmark-based ocean carrier, announced that it will implement a local port disruption surcharge for all cargo moving to and from the East Cost and Gulf Coast terminals beginning Oct. 21, according to Supply Chain Dive.
“The ocean carriers do this to force a solution,” Steven Keppler, co-director of Scopelitis Transportation Consulting, said.
“They are saying we need this resolved…this is their leverage.”
Keppler said that if the strike “drags on into next week, consumers will start to notice some items missing in the produce aisles, and they may see price increases as well in a couple of weeks.”
Chris Butler, CEO of National Tree Company in New Jersey, said that if a strike lasts only a few days, there would still be time to unload Christmas trees, transport them to warehouses, and prepare them for customers this season.
Ships carrying the trees are en route to New York but will arrive after Tuesday. If the strike continues, Butler warned that most trees would have to be stored until next Christmas season.
“Definitely not an ideal situation,” Butler said.
He says his crew began preparing for a potential strike in July.
They sped up shipments for everything possible, but one major retail client requested Christmas trees early.?
Until recently, factories in China and elsewhere couldn’t fulfill the rest of National Tree’s orders.
If a strike keeps ports closed until November, about 150,000 Christmas trees could miss the peak shopping season, costing National Tree Company and others.?
According to the AP, National Tree has already stockpiled or delivered most of the roughly 2 million artificial trees it sells each year.
But it could lose revenue if 150,000 of the trees get stuck in the pipeline.
With Post Wires
