A port strike would paralyze the supply chain and result in high holiday prices

(This story has been updated to add new information.)

Americans could also face high prices and shortages this holiday season, but this time it would be due to a worker strike and not a global pandemic.

On Thursday, the International Longshoremen’s Association (ILA) said collective bargaining with the United States Maritime Alliance (USMX) remained on hold and that about 45,000 of its union workers at 36 ports on the East and Gulf Coasts were poised to agree on October 13 go. 1 for the first time since 1977.

A strike could lead to shortages of certain items and drive up prices for voters already frustrated by housing and food inflation, experts said. The ports handle about half of U.S. sea imports, including food, clothing, auto parts, cars shipped by container and Christmas toys, experts said.

“A supply chain disruption would undoubtedly lead to price increases across the board and impact consumers’ ability to find the toys they want in the coming weeks and months,” said Greg Ahearn, president and chief executive of the Toy Association.

Which products will be affected?

Experts said that in addition to Christmas items, there could also be shortages and higher prices for the following items:

Seafood such as cod from Iceland or Canada and shrimp from Thailand and Ecuador. “These are not easy to transport by train because they are refrigerated and perishable,” Tang said. “And airships are very expensive.”
Electronics such as cell phones and computers now come from Southeast Asian countries such as Vietnam, Indonesia and Thailand instead of China and are transported through ports on the East Coast, Tang said.
Although medicines are “easier to ship by air because it is a higher value product, there could be drug shortages if negotiations cannot be completed within a month or so,” Tang said.
Cars and car parts. The Port of Baltimore, Maryland is the nation’s leader in automobile transportation. European cars come through this port and there could be bottlenecks, experts said. Auto parts from Europe also often pass through ports on the East and Gulf Coasts.
Machine parts. East Coast ports also outperform others in the U.S. in shipping machinery, manufactured steel and precision instruments, according to S&P Global Market Intelligence.

Can companies redirect shipments?

Jonathan Gold, vice president of supply chain and customs policy at the trade group National Retail Federation, said some companies prepared early:

Loading earlier than usual
Redirection of some shipments to West Coast ports

However, these steps are limited. “Retailers can’t carry everything,” he said.

Some businesses may face storage space limitations, while perishable food and other goods have no good alternative routes, Tang said. Operations at the Panama Canal are recovering from drought, ships in the Red Sea have been attacked by Houthi rebels and the Cape of Good Hope takes much longer, he said.

Additionally, “given the long lead times for toy products, significant volumes are already in transit, with shipping logistics already underway for months,” Ahearn said. “This makes it extremely difficult to rework scheduled shipments or products that are already undefined to the U.S. market via East Coast or Gulf ports.”

Flashback:Black October is here: transportation delays, labor shortages slow supply chain as holiday shopping begins

When it comes to a strike, length matters

The period after a strike can also be disruptive, some experts say.

“It’s not just about the shutdown, but also the recovery period and how long it takes to get everything back up and running again,” Gold said.

Generally, it would take three to five days to make up for a strike day, and “the longer the strike goes on, the worse it gets,” he said.

“In 2002, when we had an 11-day lockout on the West Coast due to collective bargaining, it cost (the economy) a billion dollars a day and it took us six months to recover and get things out,” Gold said. “Trade is higher now than it was in 2002, so it could take even longer.”

At that time, the Bush administration invoked the Taft-Hartley Act to force the ports to reopen. The law allows the federal government to seek a court injunction against a strike, allowing both parties to continue negotiations during an 80-day cooling-off period.

Will the Biden administration help?

The Biden administration has declined to invoke the Taft-Hartley Act. Instead, White House officials encouraged ongoing discussions, even though retail, agriculture, trade, auto care, toys and other groups had been asking for help for months.

“It’s an election year, so Biden could step in to help (Democratic presidential candidate Kamala) Harris,” Tang said. “He may not say it on the outside, but behind the scenes he could support the negotiations because it’s important to Harris is. Any chaos could impact the election.”

Calling the U.S. supply chains and economy “more resilient than when we took office,” White House spokeswoman Robyn Patterson said: “The Supply Chain Disruptions Task Force is operational – and ready to respond quickly to minimize the potential “Disruptions in the event of a prolonged strike through intensive cooperation with the ports, state and local officials, industry, workers, shipping companies, rail and trucking companies.”

No matter what happens, the story ends with higher prices

If longshoremen go on strike, Americans could soon see price increases, experts said.

If dock workers agree to a deal, “labor costs go up,” Tang said. “So in the future, consumers will still pay a higher price. Consumers will have to learn to adapt and adapt, but unfortunately it will be more expensive.”

Medora Lee is a money, markets and personal finance reporter for USA TODAY. Reach her at [email protected] and sign up for our free Daily Money newsletter every Monday through Friday morning for personal finance tips and business news.

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