The U.S. dockworkers’ strike impacting major ports from Maine to Texas began Tuesday, posing a major threat to the supply chain that could impact Americans’ ability to get products including shoes, car parts, alcohol, and certain foods.
The strike, which International Longshoremen’s Association (ILA) President Harold Daggett warned could “cripple” the nation’s economy, arose from contract negotiation disputes over wages and other issues between dockworkers and the United States Maritime Alliance (USMX). Thirty-six ports have ceased working due to the strike, barring shipping operations that could come at a $5-billion-dollar cost per day, according to an analysis by J.P. Morgan.
[time-brightcove not-tgx=”true”]The actions of the union, which represents some 85,000 workers, have left officials concerned. Numerous products from multiple industries could be affected (though workers have agreed to process any military shipments). “We just don’t realize how much comes through those different ports, but it’s literally trillions of dollars a year of both imports and exports,” says Gregory DeYong, associate professor of operations management at Southern Illinois University. “Every day is a huge loss to the economy and potential shortages for people shopping at retail.”
Fifty-three organizations representing manufacturers, farmers, retailers, and more, wrote a letter to President Joe Biden on Sept. 17 urging him to help facilitate negotiations. Just one day of striking causes five days of backlog, the letter said.
New York Gov. Kathy Hochul issued a statement Tuesday morning warning that the state was diligently working on ensuring that grocery stores and medical facilities have the products they need. Experts say that while the repercussions of the strike will be felt across the country, the disruption to the supply chain of goods did not come unexpectedly in the way COVID-19 did. “These port strikes are disruptions that gave warning,” says Rutgers Business School professor Arash Azadegan. “That helps organizations to be better prepared.”
Here are some of the products at stake in the strike.
In 2023, U.S. ports took in 39.4 million metric tons in agricultural products worth more than $110 billion, according to the American Farm Bureau.
The Bureau warns that the strike’s billion-dollar impact will especially be felt across the East and Gulf coasts. Nine major ports makeup more than 90% of all East Coast containerized agricultural exports, which can carry anything from animal feed to refrigerated meat products, per the U.S. Department of Agriculture.
DeYong says that while some manufacturers began to accumulate goods in preparation for the strike, others, particularly in the agricultural sector, could not. “The biggest things we’re going to start to see early on are those perishable items that the retailers could not stockpile,” he says.
Consumers are likely to feel shortages and delays on bananas, three-fourths of which pass through ILA-handled ports, according to the Farm Bureau. Cherries, canned food, hot peppers, and chocolate, all of which are heavily imported, will also be affected. “Any products we get from South America that, even if we could put them on trains, there’s just not enough capacity to bring them up on a train to get here, [will be impacted],” DeYong says. He predicts grapes and avocados will experience shortages.
Alcohol is another impacted category, as the U.S. regularly imports beer, wine, whiskey, scotch, and rum at impacted ports, per the Farm Bureau.
The U.S. may also experience problems in the reverse: getting products out of the country. Soybean farmers and poultry producers will likely experience domestic oversupply if they aren’t able to sell their products overseas.
The American Apparel and Footwear Association was one of the retailers that signed a letter to Biden. The organization imports more than 50% of its U.S. apparel, footwear, and accessories along the East and Gulf ports, according to a September press release.
“This disruption would occur during peak holiday shipping season and raise the price of goods even higher, sending inflation skyrocketing,” the statement said. “This potential shipping crisis will create a scarcity of goods while goods that are still available will be costly for American families.”
The American Home Furnishings Alliance, Fashion Accessories Shippers Association, Florida Retail Federation, and others also signed the letter.
The autocare industry also heavily relies on the East and Gulf Coast ports. The Auto Care Association warns that the strike would make it difficult for repair shops and distributors to meet demands for certain products and parts.
“More than four million Americans working in the auto care industry count on the steady flow of automotive parts and products through our ports each day to do their jobs,” said Bill Hanvey, president of the Auto Care Association, in a press release. “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.”
Last year, nearly a quarter of all automotive parts were imported through the affected ports, according to the press release. While many companies have recently diverted their goods to West Coast ports in anticipation of the strike, those ports are also being overburdened.
“Just because we’re getting our products through a West Coast port, doesn’t mean we’re actually going to get that,” says DeYong. “Demand is high at the West Coast ports now because they’re open. They don’t have the capacity to handle everything so there’s going to be congestion.”
The cost of shipping goods has also risen, meaning consumers will be seeing an increase in prices of products.
The U.S. depends on getting electronics from Asian countries, including China, which regularly send over microchips. That dependency, Azadegan says, means people might experience shortages of certain electronics like cell phones.
Experts say that people should not stress over the strike’s impact on medical supplies. Unlike other goods, these products or prescriptions can often be shipped through alternative routes such as by aircraft. “Yes, it’s going to cost more. Yes, there might be more pain and agony for your supply managers and logistics managers, but at the end of the day, I think most hospitals and most clinics and healthcare institutions are able to pay somewhat extra to get their supplies,” says Azadegan.
