NEW YORK (AP) – U.S. ports from Maine to Texas were shut down Tuesday as the union representing about 45,000 longshoremen went on strike for the first time since 1977.
A prolonged shutdown could raise the price of goods across the country, causing shortages and price hikes at large and small retailers alike as the holiday season and close presidential election approach.
“First and foremost, you can expect delays in getting to market. And those delays really depend on what the goods are, the priorities at the port, and how quickly things move.” said Mark Baksa, Chairman of the Chain Management Professional Council.
What is the problem with the longshoremen’s strike?
The International Longshoremen’s Association is calling for significant wage increases and a complete ban on automation of the cranes, gates and container-moving trucks used to load and unload cargo at 36 U.S. ports. These ports handle about half of the country’s cargo from ships.
The contract between ILA and the U.S. Maritime Alliance, which represents the port, expired on Tuesday. Some progress was reported in negotiations late Monday, but the union went on strike anyway.
The union’s initial proposal was for a 77% raise over the six years of the contract, which President Harold Daggett said would be needed to compensate for inflation and years of small pay increases. ILA members earn a base salary of about $81,000 a year, but some earn more than $200,000 a year with generous overtime pay.
On Monday night, the alliance announced it had increased its offer to 50% raises over six years and promised to maintain automation limits from the old contract. The coalition also said its proposal would triple employer contributions to retirement plans and enhance health care options.
Which ports are affected?
While any port can handle all types of goods, some ports specialize in handling goods from specific industries. Ports affected by the closure include Baltimore and Brunswick, Georgia, the top two busiest automobile ports. Philadelphia prioritizes fruits and vegetables. In New Orleans, we mainly handle coffee from South America and Southeast Asia, various chemicals from Mexico and Northern Europe, and wood products such as plywood from Asia and South America.
Other major ports affected include Boston. New York/New Jersey; Norfolk, Virginia. Wilmington, North Carolina. Charleston, South Carolina. Savannah, Georgia. Tampa, Florida. Mobile, Alabama. And Houston.
Can the government intervene?
If a strike is deemed a danger to the nation’s economic health, President Joe Biden could seek a court order requiring an 80-day cooling-off period under the Taft-Hartley Act of 1947. This will cause the strike to be suspended.
But in an interaction with reporters Sunday, Biden said “no” when asked if he intended to step in to plan for potential work stoppages affecting East Coast ports.
“I don’t trust Taft-Hartley because this is collective bargaining,” Biden said.
How will this impact consumers?
The strike could last weeks or months. If the strike is resolved within a few weeks, consumers probably won’t notice any major shortages of retail goods. But even though most holiday retail goods have already arrived from overseas, shortages of some consumer products are likely if the strike continues for more than a month. Shoppers could see higher prices on a wide range of products, from fruit and vegetables to cars.
Retailers have contingency plans in place
Since pandemic bottlenecks caused massive supply chain disruptions in 2021, retailers have adapted to supply chain disruptions being the “new normal,” says Patina in the Twin Cities, Minnesota area.・Rick Haas, who runs a mini-chain of gift shops, said:
“The best approach for Patina was to secure orders early and store products in warehouses and backrooms to ensure availability of key items,” Haas said.
Daniel Vasquez, owner of Dynamic Auto Movers in Miami, which specializes in importing and exporting cars, increased his inventory in anticipation of the strike, especially cars that take a long time to ship.
He also moved away from relying on a single port or shipping partner and expanded relationships with smaller ports and shipping companies that can bypass congested areas.
“This move gives us an advantage. Having a back-up partner means we can efficiently reroute transport in the event of a serious strike,” Vazquez said. .
How will the strike affect holiday shopping?
Jonathan Gold, vice president of supply chain and customs policy at the National Retail Federation, the country’s largest retail industry group, said supply chains continue to face challenges from Houthi attacks on commercial shipping and virtually no He stated that the latest strike was carried out while the use of the service has been suspended. A view of the Red Sea and the Suez Canal.
The uncertainty around supply chains comes during the peak of retailers’ holiday shopping season, which traditionally runs from July to early November. Many major retailers had begun shipping goods to U.S. distribution centers in June in anticipation of the strike, and Gold said the majority of ordered goods were already in the United States.
However, retailers struggle to replenish products and incur extra warehousing costs to store products longer. Gold also noted that airlines have already announced surcharges on containers to deal with potential disruptions.
The Toy Association, the main U.S. toy industry group, was one of about 200 industry groups that sent a joint letter to President Biden earlier this month urging the administration to work with ILA and USMX to finalize the deal. is. Greg Ahern, the company’s president and CEO, said the strike comes at a critical time for toy sellers and manufacturers. That’s because up to 60% of toy companies’ annual sales occur in the fourth quarter.
The toy industry’s holiday shipping period is six to eight weeks and began in July, but some toy companies are trying to speed up shipments or add toys to their shipments, Ahern said. .
“It affects us in many ways,” he said. “From a consumer perspective, it starts with delays in availability and then begins to surface as product shortages in toys. In toy industry retail, prices can go up based on scarcity and increased costs. .”
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Associated Press writers Tom Krisher in Detroit and Stephen Groves in Dover, Delaware, contributed to this report.
