Product impact due to port strikes may impact Christmas shopping

If you haven’t been able to start your holiday shopping early, you may find that some of the items on your loved ones’ wish list may be more difficult (and more expensive).

More than 30 ports on the East Coast and Gulf Coast were closed as 45,000 union workers walked off the job after labor negotiations between the International Longshoremen’s Association (ILA) and the United States Maritime Alliance (USMX) stalled.

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

The strike in eastern and Gulf ports is the first since 1977, when ILA longshoremen were off work for 60 days.

Here’s what you need to know about the strikes and how they’ll affect both your weekly shopping and your upcoming holiday shopping trips.

Why are American longshoremen on strike?

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

According to CNBC, the ILA expects a 61.5% wage increase over six years. She also demanded a ban on the use of automatic cranes, gates and trucks in ports.

“They (USMX) don’t care about us,” ILA President Harold Daggett said in a post on Monday. “They would like to see automation all over the eastern Gulf Coast, and trust me when I say that if it were up to them, we wouldn’t have jobs.”

On Monday, USMX said in a statement that it had offered a nearly 50% wage increase, triple employer contributions to employee retirement plans, “strengthening our health care options and retaining current language regarding automation and semi-automation.”

Which US ports are closed?

The strike is taking place at 36 ports along the Atlantic and Gulf Coasts, including three in Florida. On the east coast, affected ports include:

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

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

Will port strikes affect Christmas shopping? Experts say yes

The port strikes will have an impact on holiday shopping, from shortages of certain items to more expensive items.

“Supply chain disruptions would undoubtedly lead to overall price increases and impact consumers’ ability to find the toys they are looking for in the coming weeks and months,” Greg Ahearn, president and CEO of The Toy Association Today, told USA.

Small and medium-sized enterprises and exporters, especially farmers, may feel the effects even earlier due to rising costs and product shortages. According to the Small Business Administration, small businesses drive more than 40% of economic activity.

While large companies like Walmart and Costco can afford to stock up ahead of time and store them or cover the costs of redirecting supplies to the West Coast, smaller companies typically can’t do so, experts say.

As a result, “some businesses may completely lose critical holiday supplies,” 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 enduring a full-year loss.”

The clock is ticking. The clock is ticking if we want to avoid disruption to holiday shopping.

“Any strike that lasts longer than a week could result in merchandise shortages for the holidays,” said Eric Clark, portfolio manager of the Rational Dynamic Brands Fund.

Which products will be affected by port strikes?

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

Seafood: Perishable products such as cod from Iceland and Canada and shrimp from Thailand and Ecuador cannot be easily transported by train because they must be refrigerated, Tang said.
Electronics: Cell phones and computers that now come from Southeast Asian countries such as Vietnam, Indonesia and Thailand, instead of China, are routed through East Coast ports, Tang said.
Pharmaceuticals: Although it is easier to ship them by air, consumers may still notice drug shortages if negotiations are not completed within about a month, Tang said.
Cars and car parts: European containerized cars and auto parts often transit through ports on the East Coast and Gulf Coast. According to experts, the port in Baltimore, Maryland, leads the country in car deliveries.
Machine parts: According to S&P Global Market Intelligence, East Coast ports outperform other U.S. ports in shipments of machinery, prefabricated steel and precision instruments.
Alcohol: Wines, beers and spirits imported from Europe, South America and the Caribbean may benefit. Fortunately, American drinkers have plenty of domestic options.
Bananas: About 75% of the country’s bananas go through ports on the East Coast and Gulf Coast, said Jason Miller, interim chair of supply chain management at Michigan State University. Moreover, because the fruit is perishable, it is not economical to transport it on planes, Miller wrote in a LinkedIn post.

How long is the strike expected to last?

USA Today said that now that the strike is underway, experts are focusing on how long the strike might last. Some economists estimate that each day of strike could cost the economy as much as $5 billion a day due to the blockage of imports and exports.

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

He added that for every day of strike, it would take about three to five days to clear the backlog and resume normal operations. “The longer it goes on, the more complicated it gets,” he said.