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Will port strike impact holiday shopping? Here’s what to know, what items are affected

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Will port strike impact holiday shopping? Here’s what to know, what items are affected

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If you haven’t gotten a head start on your holiday shopping, you’ll might find that some of the items on your loved ones wish list may be harder (and more expensive) to find.

Over 30 East Coast and Gulf Coast ports have shut down as 45,000 union workers walked off the job after labor negotiations stalled between the International Longshoremen’s Association (ILA) and the United States Maritime Alliance (USMX).

The labor contract between 45,000 union dockworkers and the USMX expired at midnight on Oct. 1. The strike has now closed the U.S. ports where more than 68% of container exports and more than 56% of container imports flow through, according to the National Association of Manufacturers.

The strike at Eastern and Gulf ports is the first since 1977, when ILA dockworkers walked off the job for 60 days.

Here’s what to know about the strikes, as well as how it impact both your weekly shopping and upcoming holiday shopping trips.

Why are US dock workers striking?

The dispute is between two major players in U.S. shipping, the International Longshoremen’s Association, a union that represents dockworkers, and the United States Maritime Alliance, an association of shipping companies, port terminal operators and port authorities.

The ILA is looking for a 61.5% pay increase over six years, according to CNBC. It also sought a ban on automated cranes, gates and trucks at ports.

“They (USMX) don’t care about us,” said ILA President Harold Daggett in a post on Monday. “They would love to see automation up and down the whole East and Gulf Coast, trust me when I tell you that if it was up to them, we would have no jobs.”

On Monday, USMX said in a statement it had offered to increase wages by nearly 50%, triple employer contributions to employee retirement plans, “strengthen our health care options, and retain the current language around automation and semi-automation.”

What US ports are closed?

The strike is taking place across 36 ports along the Atlantic Coast and the Gulf of Mexico, including three in Florida. On the East Coast, ports impacted include:

  • Baltimore
  • Boston
  • Charleston, South Carolina
  • Jacksonville, Florida
  • Miami
  • Houston
  • Mobile, Alabama
  • New Orleans
  • New York/New Jersey
  • Norfolk, Virginia
  • Philadelphia
  • Savannah, Georgia
  • Tampa, Florida
  • Wilmington, Delaware

Port strikes: How will port strike affect Florida cargo operations, Disney, Royal Caribbean cruises?

Will the port strikes impact holiday shopping? Experts say yes

Holiday shopping will be affected by the port strikes, from lack of certain items to more expensive goods.

“A supply chain disruption would undoubtedly lead to price increases across the board and would impact consumers’ ability to find the toys they are looking for in the weeks and months ahead,” Greg Ahearn, president and chief executive of The Toy Association, told USA Today.

Small and medium-sized businesses and exporters, especially farmers, might feel the effects even sooner amid rising costs and product shortages. Small businesses power more than 40% of economic activity, according to the Small Business Administration.

Though large firms like Walmart and Costco can afford to take inventories early and store them or absorb the cost of rerouting shipments to the West Coast, smaller businesses typically can’t, experts said.

As a result, “some businesses could miss out on critical holiday supplies entirely,” said Ben Johnston, chief operating officer at small business lender Kapitus. “Given the low margins of most small manufacturers, retailers and wholesalers, a strike of this nature could be the difference between turning a profit or stomaching a loss for the year.”

If holiday shopping disruptions are to be avoided, the clock is ticking.

“Any strike that lasts more than one week could cause goods shortages for the holidays,” said Eric Clark, portfolio manager of the Rational Dynamic Brands Fund.

What products will be impacted by port strikes?

According to USA TODAY, these are the items that may experience shortages and higher prices include:

  • Seafood: Perishable products like cod from Iceland or Canada and shrimp from Thailand and Ecuador aren’t easily transported by train because they need to be refrigerated, Tang said.
  • Electronics: Cell phones and computers, which now come from southeast Asian nations like Vietnam, Indonesia, and Thailand instead of China, are routed through East Coast ports, Tang said.
  • Pharmaceuticals: Although these are easier to ship via air, consumers may still notice drug shortages if negotiations can’t be settled within about a month, Tang said.
  • Cars and auto parts: European cars shipped via container and auto parts often pass through East Coast and Gulf Coast ports. In fact, the Port of Baltimore, Maryland, leads the nation in car shipments, according to experts.
  • Machinery parts: The East Coast ports surpass others in the U.S. in shipments of machinery, fabricated steel and precision instruments, according to S&P Global Market Intelligence.
  • Alcohol: Wine, beer and spirits imported from Europe, South America or the Caribbean may take a hit. Fortunately, American drinkers have plenty of domestic options.
  • Bananas: About 75% of the nation’s bananas enter through East Coast and Gulf Coast ports, said Jason Miller, interim chair of Michigan State University’s department of supply chain management. Moreover, because the fruit is perishable, it’s not economical for them to be shipped on planes, Miller wrote in a LinkedIn post.

How long is the strike predicted to last?

Now that the strike is on, USA Today said experts are turning their focus to how long the strike may last. Each day of the strike could cost the economy up to $5 billion a day as imports and exports are blocked, some economists estimated.

“It’s not just about the shutdown but also, about the recovery period and how long it takes to get things up back and running,” said Jonathan Gold, vice president of supply chain and customs policy at the National Retail Federation.

For each day of the strike, it takes about three to five days to clear the backlog and resume normal operations, he said. “The longer it goes, the more it gets compounded,” he said.

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