UPDATE ADDED 10/1/24
Never before in the HISTORY OF THE USA, have we US Citizens been more at the mercy of IMPORTS. The USA historically has not only been blessed to be able to completely supply all that we needed, we also used to export our SURPLUS all over the world.
Most people in the USA today probably are not even aware of how dependent we have become on imports. You probably don’t even know how much of the food you eat, including vegetables and fruits, come for foreign sources.
But it is not just food. Most everything we consume comes from foreign sources. Clothing, gems and precious metals, electrical products, machinery (including computers and hardware), phones, vehicles and automobiles and their parts, plastics, crude oil, pharmaceutical products, medical equipment and supplies, organic chemicals, coffee and tea, sweeteners, processed sugar, confections, minerals, fuels, and oil, furniture, lighting, and signs.
Not only that, but many if not most of our ports are owned and operated by foreign nations. And much of our industry is owned and operated by foreign interests. So, even what is grown or produced here, is not in our control.
WE ARE SO VERY VULNERABLE ON SO MANY LEVELS RIGHT NOW, and this at a time where there are more FOREIGNERS living among us ILLEGALLY. They have entered our nation without any vetting and we have no idea what they are here to do. Most of them are men of fighting age and of political and religious beliefs that are in opposition to those of our citizens. This is also the time the those who want to enforce a ONE WORLD GOVERNMENT are pulling out the stops and doing all they can to break any resistance. THIS DOES NOT BODE WELL FOR US.
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UPDATE ADDED 10/1/24
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SUPPLY CHAIN COLLAPSE IMMINENT
UPDATE: 10/23/2021; 2:45:02 AM We have watched this coming supply chain collapse building, and building for years now. There is no way to avoid it. The only variable is the timing. If you are watching then you are aware that everything is closing in on us at the same time. This is just one more … Click Here to Read More
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Dockworkers at ports along the East and Gulf Coasts are expected to strike at midnight which could cause a major disruption for the US supply chain. Mark Szakonyi, S&P Global Market Intelligence’s container shipping and logistics expert and executive editor of the Journal of Commerce, joins Seana Smith and Madison Mills on Catalysts to break down the International Longshoremen’s Association’s (ILA) demands.
Szakonyi tells Yahoo Finance, “The International Longshoremen’s Association has been very strong against any kind of automation on the East and Gulf Coasts. You have a degree of what they so-called call semi-automation at certain rail facilities, but they’re definitely trying to hold the line.”
He explains the fight for protections against automation is “something that we’re seeing across any unions working in Western economies in which they’re pushing back. To some degree, there are safety gains that can be gained through automation, but unions are also rightly concerned about [the] loss of jobs. Really, I think in this wage discussion, it’s much, much more about salary.”
Experts indicate that the length of the strike will determine the severity of the supply chain disruption. Szakonyi says, “We see both sides as being pretty dug in. We reported that US employers have tried to make overtures to the ILA about 10 times since June, [but] no luck there. [The] ILA has been very fierce with its rhetoric.”
He expects “it’s going to come down to most likely the Biden administration stepping in and while they have said that they have no plan to invoke Taft-Hartley, would break up, or at least put a freeze on the deal and continue to get cargo moving through the port, that calculation might change. The costs are going to ramp up,” with Morgan Stanley estimating the cost could have a $45 billion impact per day.
“It will be really interesting as the Biden administration kind of looks at the calculation of wanting to make sure that they allow this contract agreement or allow the negotiations to go through, and not turn off the labor side of Democrats supporting [presidential candidate] Kamala Harris, but at the same time, showing economic stewardship because the longer this goes on, the larger the economic impact will be, and it’s going to have other knock-on ripples.”
For more expert insight and the latest market action, click here to watch this full episode of Catalysts.
This post was written by Naomi Buchanan.
East Coast port strike looms for first time since 1977. Here’s what to know.
The White House outreach continued through the weekend, White House spokesperson Robyn Patterson said on Sunday.
“This weekend, senior officials have been in touch with USMX representatives urging them to come to a fair agreement fairly and quickly — one that reflects the success of the companies. Senior officials have also been in touch with the ILA to deliver the same message,” Patterson stated.
Experts say a shutdown could severely hamper the flow of goods and raise shipping costs. Any spike in such expenses could be passed on to consumers just as U.S. inflation normalizes, and even potentially hinder the Federal Reserve as it finally pivots to lowering interest rates.
Here’s what to know about the labor fight, which would be the first mass work stoppage at eastern ports in nearly half a century.
What are the key issues in the labor dispute?
The dispute involves a contract covering tens of thousands threatening to strike at ports from Massachusetts to Texas if a new labor deal with the USMX isn’t reached before the current contract expires at midnight on September 30. A walkout would be the first East Coast dock strike since 1977.
A total of 14 ports involving some 25,000 workers could be affected by the strike, according to USMX: Baltimore; Boston; Charleston, South Carolina; Jacksonville, Florida; Miami; Houston; Mobile, Alabama; New Orleans; New York/New Jersey; Norfolk, Virginia; Philadelphia; Savannah, Georgia; Tampa, Florida; and Wilmington, Delaware.
But because the economic activity in ports touches a range of businesses, such as warehousing and transport, the fallout from work stoppages could put more than 100,000 employees temporarily out of work, according to economists.
Union workers at ports in the East Coast and Gulf Coast earn a base wage of $39 an hour after six years on the job. That is significantly less than their unionized West Coast peers, who make $54.85 an hour — a rate that will increase to $60.85 in 2027, excluding overtime and benefits.
Assuming a 40-hour workweek, West Coast port workers are making more than $116,000 a year, versus $81,000 for their counterparts in the East. The ILA’s initial demands included a 77% wage hike over six-year contract, with the labor group arguing that the increased pay would make up for the surge in U.S. inflation in recent years.
The USMX in August offered what it called an “industry leading” pay hike, but the sides remain far apart.
“Mark my words, we’ll shut them down October 1 if we don’t get the kind of wages we deserve,” Harold Daggett, president of the ILA, said earlier in the month.
Yet the differences are not only over pay. To protect job security, the ILA is demanding a complete ban on the automation of cranes, gates and container movements used in the loading or unloading of cargo.
The Maritime Alliance said it offered to maintain provisions in the current contract barring fully automated terminals, while also banning use of semi-automated equipment in a new labor agreement.
Unable to bridge the divide, the ILA in June suspended negotiations with USMX, saying the use of automated gates to let trucks enter ports without ILA labor violated its existing labor agreement.
What impact could a strike have?
The ports that could close in a strike handle more than 68% of all containerized exports in the U.S. and roughly 56% of containerized imports, according to industry data. So even a short strike would cause significant disruptions in regional trade flows.
A strike would reduce U.S. economic activity by between $4.5 billion and $7.5 billion for every week it continues, according to analysts at Oxford Economics. The investment research firm estimates it would take up to a month to clear the backlog of shipments that pile up while ports remain shut.
Although West Coast terminals could absorb some cargo diverted from eastern ports, they couldn’t handle it all, nor could the U.S. rail system, experts say.
Should a strike persist longer than a month or so, some companies could face shortages of parts and other inputs. Much of the raw materials that go into a range of products flow through the East and Gulf Coast ports, such as cotton, wood and copper. The auto and pharmaceutical industries, which maintain lean inventories, could be affected, while port shutdowns in Miami and Norfolk could affect tobacco companies.
In addition, a strike could hamper shipments of products such as bananas, manufacturing components and plywood, interrupting the flow both of consumer goods and industrial parts for factories. Fresh meat and other refrigerated food could spoil, resulting in shortages and increased prices.
“I think everyone’s a bit nervous about it,” said Mia Ginter, director of North America ocean shipping for C.H. Robinson, a logistics company. “The rhetoric this time with the ILA is at a level we haven’t seen before.”
The labor dispute also comes at a time when the Federal Reserve is closely monitoring the labor market for signs of weakening.
“In principle, the Fed should look through any temporary weakness, but it might be difficult to separate the noise from the signal. Therefore, the strike would increase the odds of another 50 basis point cut in November,” Grace Zwemmer, associate U.S. economist, Oxford Economics, wrote in a Thursday research note.
How are companies preparing?
By contrast, consumers probably wouldn’t notice shortages of store goods during the holiday shopping season, as most products are already housed in warehouses after being transported ahead.
Jonathan Chappel, senior managing director of transportation at Evercore ISI, an investment research firm, said a strike would not mean “Santa’s not showing up.”
Imports to U.S. ports are running 10% ahead of where they were last year, indicating that some cargo had been shipped in expectations of a strike, according to Ben Nolan, a transportation analyst at investment bank Stifel.
“Many retailers have already taken steps to mitigate the potential impact of a strike by bringing in products earlier or shifting products to the West Coast,” said Jonathan Gold, vice president of supply chain and customs policy at the National Retail Federation.
Still, given the complexity and interconnectedness of global supply chains, “Even a minor disruption would have a negative impact and cause delays at a critical time for both retailers and consumers,” he added.
The ILA on Wednesday said its members would continue to handle all military cargo in the event of a strike, and would also continue to work passenger cruise vessels so as not to inconvenience “the tens of thousands of Americans who have booked trips in advance.”
Could there be a political solution?
If a strike were deemed to threaten national health or safety, under the Taft-Hartley Act the president could seek a court order for an 80-day cooling-off period.
Although a Biden administration official tells CBS News that the U.S. Labor Department is monitoring the situation and has been in touch with the sides, there are currently no plans to get involved in the talks.
“We’ve never invoked Taft-Hartley to break a strike and are not considering doing so now,” the White House told CBS News.
By contrast, the Biden administration has in recent years intervened to resolve potentially disruptive labor disputes.
In 2022, Mr. Biden and Congress stepped in to prevent a railroad strike, with the president signing legislation crafted by lawmakers to impose a tentative deal on dozens of unions representing 115,000 workers. And in 2023, Acting Labor Secretary Julie Su played a key role in brokering a deal to avert a strike and broker a new labor deal for West Coast dockworkers.
The union’s leverage is also stronger ahead of the presidential election as candidates vie for the labor vote, and with visions of clogged ports and product shortages during the pandemic still in voters’ minds.
“If ever there was a time that labor can get what they want,” Stifel’s Nolan said, “it’s right now.”
Some observers think that when push comes to shove, Mr. Biden would act to prevent the walkout.
It’s unlikely that the U.S. government would intervene as promptly as Canada did in a labor dispute that shut down the country’s rail traffic last month, when the Canadian government ordered railroads to enter binding arbitration less than a day in, noted Zwemmer at Oxford Economics.
“However, if the strike lasts for several weeks, the odds of government involvement in the negotiations will rise, especially with the presidential election rapidly approaching,” the economist stated.
“The potential strike at East and Gulf Coast ports is unlikely to trigger any major economic disruption because we strongly suspect that, this close to the election and despite denials ahead of time, President Biden would have little choice but to step in and invoke back-to-work legislation,” analysts at Capital Economics wrote.
- Fruits and vegetables: The U.S. imports many fresh fruits and vegetables, including bananas.
- Tree nuts: The U.S. imports tree nuts as part of its agricultural imports.
- Seafood: The U.S. imports fish and shellfish.
- Dairy products: The U.S. imports dairy products.
- Meat and poultry: The U.S. imports meat and poultry.
- Specialty foods: The U.S. imports a variety of specialty foods.
- Sugar and tropical products: The U.S. imports sugar and tropical products.
- Coffee: The U.S. imports coffee.
- Cocoa: The U.S. imports cocoa.
- Rubber: The U.S. imports rubber.
The U.S. imports a higher share of higher-value agricultural products due to factors such as consumer preferences, seasonal availability, and production competitiveness. The U.S. imports more fruits, vegetables, and nuts, but relies less on imports for unprocessed commodities like livestock, feed grains, and oilseeds.
Most of America’s Fruit Is Now Imported. Is That a Bad Thing?
How much does the US import?While the US does maintain an agricultural trade surplus, imports grew at a faster rate than exports from 2016–2019, causing the trade surplus to narrow. The US primarily imports fruits, vegetables, sugar, and tropical products such as coffee, cocoa, and rubber. Mexico and South America provide the bulk of the fruits and vegetables imported, while Canada is the largest supplier of meat and fish. The portion of food and beverage products the US imports has steadily increased since the 1990s. In 2016, 12.7% of the money Americans spent on food and beverages went to imported products. This is nearly double the percentage spent on imported food in 1993. This is largely due to consumers’ newfound expectation that they will have access to fresh produce year-round as well as the strengthening of supply chains and global trade routes, according to the USDA. The disruption of the supply chain is one of the reasons prices for food in the US have risen since the beginning of the COVID-19 pandemic. Learn more about agriculture and farms in the US and get the facts every week by signing up for our newsletter. |
The COVID-19 pandemic revealed how 40 years of increasing dependence on imports and the resulting hollowing out of U.S. manufacturing has created unacceptable national vulnerabilities.
For instance, despite the fact that the United States is a world leader in semiconductor design and R&D, chip manufacturing occurs mostly in Asia. Only 12 percent of the world’s semiconductor chips are made in the United States, down from 37 percent in 1990. The overdependence of the United States on imports creates national and economic security risks.
Trade wars and the pandemic caused widespread supply disruptions of security-sensitive and critical components like computer chips and medical devices. Sticking with our semiconductor example, automakers and their suppliers canceled semiconductor orders at the onset of the pandemic as car sales plummeted but demand quickly rebounded. Concurrently, a demand surge for personal electronics created a chip crunch. “Automakers and suppliers that use chips contacted chipmakers and put back their orders,” said Michelle Krebs, executive analyst for Autotrader. “By then, chip capacity was consumed by other businesses—phones, computers, video games—as people worked and schooled at home.”
Import Dependence and Vulnerability
When chip fabrication and packaging went offshore, U.S. intellectual property went with it, leaving us vulnerable to national security threats. Total global semiconductor demand share by end use in 2019 was communications (33%), computer (28.5%), consumer (13.3%), automotive (12.2%), industrial (11.9%), and government (1.3%). Chips are used in devices like computers, tablets, and phones but also in medical equipment, military equipment, wireless networks, cars, and manufacturing equipment.
How Dependent is Too Dependent?
In order to avoid being too dependent, the United States should produce at least 50 percent of what it consumes, for most products. If foreign supply is cut off, a 100 percent increase is feasible in many cases by working 24/7. Another criterion would be to cut our trade deficit to zero, which is the average condition of all countries. The resulting 40 percent increase in production would dramatically reduce dependencies.
Even before the pandemic-driven disruption, some companies were already trying to improve supply chain resiliency. A 2019 MGI survey found that 70 percent of respondents expected to change their global sourcing strategies with 32 percent planning to move in closer proximity to consumers. By May 2020, 93 percent of supply chain leaders were planning to increase resilience, with 44 percent willing to do so even at the expense of short-term earnings. Let’s look at some aerospace and defense companies that decided to shorten supply chains and manufacture in the U.S.
Setting Up Shop in the U.S.
NHanced Semiconductors is expanding the cleanroom of its North Carolina foundry to house a new high-volume line of advanced packaging (AP) equipment. The new line is expected to be capable of constructing up to 10,000 three-dimensional integrated circuit wafer stacks per month. The expansion will also enable greater capacity for 2.5 D interposer fabrication and die-to-wafer assembly. Domestic sourcing of these AP technologies is critical to aerospace and defense agencies and many U.S. manufacturers. Government incentives, lead time, time to market, underutilized capacity and import replacement made U.S. manufacturing attractive.
In September 2020, SkyWater Technology, a U.S.-based and U.S.-owned semiconductor foundry, announced a facility expansion supported by a Department of Defense (DOD) investment of up to $170 million. The DOD’s investment was made under the Trusted and Assured Microelectronics (T&AM) program, which is developing enhanced sources of microelectronics for the department’s unique needs. The T&AM program seeks to collaborate with industry and key laboratory partners to provide sustainable, assured technology solutions for national security and defense. Supply chain interruption risk, natural disaster risk and political instability made manufacturing offshore less attractive.
Aerospace assemblies manufacturer Killdeer Mountain Manufacturing (KMM), invested $8 million to establish a fourth U.S. plant in Texas. KMM is a custom manufacturer of circuit boards, wire harnesses, fiber-optic assemblies and ground support equipment for aerospace, commercial and military applications. A $900,000 state grant made U.S. manufacturing attractive. KMM is a Tier 1 supplier in an aviation niche with customers that include Boeing, Raytheon and Lockheed Martin Corp. The investment is expected to create 200 jobs.
MEMC Electronic Materials, a subsidiary of Taiwanese company GlobalWafers, is investing $210 million in its O’Fallon, Mo., facility, adding 75 jobs. The project will add a production line for 300-mm wafers, which will be used by semiconductor maker GlobalFoundries in the production of computer chips at its advanced manufacturing facility in upstate New York. The investment will help meet a growing demand for advanced radio frequency technologies from the telecommunications, automotive, and aerospace sectors.
Our Concern
Investing billions of dollars in chip foundries is essential. However, there is a risk in letting the chips fall where they may. The U.S. risks going from being dependent on Taiwan and China for chips to being dependent on those countries to buy the chips our new chip foundries will create. We recommend making the U.S. cost competitive for the assembly of servers, cell phones, automotive electronics, machinery and more to overcome this problem. The best means to this end are a much stronger skilled workforce, a lower-valued U.S. dollar, a value-added tax and keeping corporate tax rates competitive.
Using TCO for Sourcing and Siting
Now is an especially good time for companies to re-evaluate the choice of domestic vs. offshore production. To help quantify those costs, the Reshoring Initiative website provides tools to help companies decide objectively whether their overhead will come down more than their manufacturing cost goes up when sourcing locally.
The free online Total Cost of Ownership Estimator will more accurately determine the real profit and loss impact of reshoring or offshoring. After doing the math, most companies will decide to bring some work back.
See if reshoring makes economic sense for your company. The Reshoring Initiative’s resources can be found on the website ReshoreNow.org.
‘I will cripple you’ — dockworker’s union vows to shut down U.S. economy with strike
Shipping containers are seen at the Port of Houston Authority on September 20, 2024 in Harris County, Texas. The International Longshoreman’s Association’s chief negotiator has said a strike would “cripple” the U.S. economy.Photo: Brandon Bell/Getty Images
“I will cripple you”
— International Longshoremen’s Association chief negotiator Harold Dagget
This was the warning given by the International Longshoremen’s Association’s chief negotiator, Harold Dagget, in September as the dockworker’s union was readying itself to launch a major strike that on Tuesday saw the start of the biggest shutdown of U.S. ports in almost 50 years.
In a video posted by the dockworker’s union last month, the ILA chief negotiator warned a dockworkers strike has the power to “cripple” the U.S. economy, by blocking the import of everything from cars and clothes to construction materials.
“These people today don’t know what a strike is,” Dagget said. “When my men hit the streets, from Maine to Texas, every single port will lock down… Everything in the United States comes on a ship.”
The ILA chief negotiator, who first joined the dockworkers union in 1967, said the walkouts over pay and job security will slowly lead to a shutting down of America’s economy that will eventually lead to layoffs if shipping firms fail to meet the strikers’ demands.
“First week, be all over the news every night, boom, boom. Second week, guys who sell cars can’t sell cars because cars ain’t coming in off the ships, they get laid off. Third week, malls start closing down, they can’t get goods from China, they can’t sell clothes.”
“Construction workers get laid off because the materials aren’t coming in. The steel’s not coming in. The lumber’s not coming in. They lose their jobs. Everybody’s hating the longshoremen now because now they realize how important our jobs are.”
The ILA, which represents 85,000 dockworkers across America’s east and gulf coasts, has accused shipping companies of making record profits by “gouging their customers” through price hikes during COVID-19.
See also: Chamber of Commerce calls on Biden to stop dockworkers strike, citing inflation fears
A major maritime workers strike is set to begin on Tuesday, and it means a likely HALT of imports and exports of key goods — from cars to food — across the East and Gulf Coasts.
The International Longshoremen’s Association, the largest union of maritime workers in the US, announced last week that it was prepared to strike on October 1 if demands in their union contract, primarily higher wages, are not met. On Sunday, the union announced the strike is set to go ahead as planned after contract negotiations stalled.
“United States Maritime Alliance (USMX) refuses to address a half-century of wage subjugation where Ocean Carriers profits skyrocketed from millions to mega-billion dollars, while ILA longshore wages remained flat,” the union said in a statement posted to Facebook. “ILA unity remains strong and is growing.”
The planned strike would include 85,000 members of the International Longshoremen’s Association, as well as “tens of thousands of dockworkers and maritime workers around the world,” the union’s statement added, striking at all Atlantic and Gulf Coast ports from Maine to Texas.
According to an ILA press release, the union wrote in a letter to its membership that its workers, who primarily work on shipping docks to load, unload, and inspect cargo and operate heavy machinery, are “struggling to pay their mortgages and rent, car payments, groceries, utility bills, taxes, and in some cases, their children’s education,” emphasizing the need for boosted pay in its upcoming contract.
The strike, if it takes place, will have widespread implications across the US, with significant shipment delays that could set off a chain reaction of disruptions. It would be the first coast-wide strike by ILA members since 1977, Reuters reported.
“A prolonged strike could lead to weeks, or possibly months, of shipping delays and backlogs, worsened by limited rerouting options, high costs and time constraints,” Abe Eshkenazi, CEO of the Association for Supply Chain Management, told BI. “The supply chain is inextricably linked, and as we enter the busiest shopping season of the year, businesses, retailers, and consumers alike will feel the impact of a stoppage.”
According to the National Association of Manufacturers, over half of imports and exports come through the East and Gulf Coast ports, handling pharmaceuticals, vehicles, and retail, among other things, and generating an average of over $2.1 billion each day. Depending on the length of the strike, supply-chain disruptions could also lead to price hikes for consumers.
The United States Maritime Alliance, which represents the companies that employ longshoremen, said on September 23 that despite attempts to resume bargaining with the ILA they “have been unable to schedule a meeting to continue negotiations.”
A port strike will bring to a halt, about $5 Billion A DAY in commercial activity! Disruption to the U.S. Supply Chain will be fast and serious.
Most U.S. companies run on a “just-in-time” inventory system. They do not order huge quantities of replacement goods just to store them in warehouses; that’s far too expensive.
So companies know how much they sell each month, and how fast, and they order accordingly. Now, those orders cannot get through; replacement inventory cannot arrive.
Today is the very last day you can be assured of getting a lot of the products you may need, that are imported into the country. If you don’t have it by today, you may not be able to get it.
Stock-up. Now.
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Experts warn store prices will soar and shelves will be empty as greedy dockworkers strike over 80% pay raise
US ports from Maine to Texas could shut down Monday night if a union representing about 45,000 dockworkers carries through with a threatened strike.
A lengthy shutdown of 36 ports – which handle half of America’s cargo from ships – could raise cause shortages and price increases at big and small retailers alike as the holiday shopping season approaches.
Walmart, Home Depot, Ikea and Amazon – who import tens of thousands of containers a year through ports on the east coast – would be worst hit. Empty shelves have not been seen in the US since the post-pandemic supply chain crush in 2021.
The International Longshoremen’s Association is demanding a pay rise that works out at about 77 percent over six years. For union members on a typical rate, their wage would go from $81,120 to around $143,520.
Retail expert Neil Saunders of Global Data told DailyMail.om that the strike will cause two main problems – shoppers will face higher prices and empty shelves.
Ship to shore cranes and gangs of longshoremen work the container ship YM Witness at the Georgia Ports Authority’s Port of Savannah in Georgia in 2021
He said: ‘First, it will push up costs for retailers and, therefore, prices for consumers.
‘Second, it could lead to shortages of some products if retailers’ stock get stuck in the supply chain. Unfortunately, the strike is at the busiest time of the year for retail, a time when there is not much slack in the system.
‘Many retailers have made plans to mitigate strike action, including rerouting products to West Coast ports and using air freight.
‘However, retailers can’t do this for every product and utilizing these options still costs them more money, so it is only a partial solution at best.
‘Basically, the country is very reliant on the smooth running of the ports and disruption will come with a very heavy economic cost.’
‘First and foremost, we can expect delays to market,’ said Mark Baxa, president of the council of supply chain management professionals.
The International Longshoremen’s Association is demanding a pay rise that works out at about 77 percent over six years.
They also want a total ban on the automation of cranes, gates and container-moving trucks that are used in the loading or unloading of freight at 36 US ports.
The contract expires between the International Longshoremen´s Association and the United States Maritime Alliance, which represents the ports, on Tuesday.
The two sides haven’t held negotiations since June. A strike by the ILA workers would be the first by the union since 1977.
While any port can handle any type of goods, some ports are specialized to handle goods for a particular industry.
The ports that would be affected by the shutdown include
- Baltimore and Brunswick, Georgia, the top two busiest auto ports
- Philadelphia, which gives priority to fruits and vegetables
- New Orleans, which handles coffee, mainly from South America and Southeast Asia, various chemicals from Mexico and North 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.
‘First and foremost, we can expect delays to market,’ said Mark Baxa, president of the council of supply chain management professionals.
If a strike were deemed a danger to U.S. economic health, President Joe Biden could, under the Taft-Hartley Act, seek a court order for an 80-day cooling-off period. This would suspend the strike.
Brian Ossenbeck, an analyst at JPMorgan, said he believes Biden might take this route, even though for the moment the administration says it has no plans to.
‘We believe the economic impact of a disruption would be too big to ignore for much more than a week given the economy and inflation are key issues in the heavily contested election,’ he wrote in a note to clients.
The strike could last weeks – or months. If a strike were resolved within a few weeks, consumers probably wouldn´t notice any major shortages of retail goods.
But a strike that persists for more than a month would likely cause a shortage of some consumer products, although most holiday retail goods have already arrived from overseas.
Shoppers could see higher prices on a vast array of goods, from fruit and vegetables to cars.
Since the major supply chain disruption in 2021 caused by pandemic bottlenecks, retailers have adapted to supply chain disrupters being ‘the new norm,’ said Rick Haase, owner of a mini-chain of Patina gift shops in and around the Twin Cities in Minnesota.
‘The best approach for Patina has been to secure orders early and have the goods in our warehouse and back rooms to ensure we are in stock on key goods,’ he said.
Daniel Vasquez, who owns Dynamic Auto Movers in Miami, Florida, which specializes in importing and exporting vehicles, increased inventory, specifically for vehicles that take longer to ship, in anticipation of a strike.
He has also stopped relying on one port or shipping partner and has expanded his relationship with smaller ports and shipping companies that can bypass congested areas.
‘This move provides us with an edge – having backup partners in place means we can reroute shipments efficiently if the strike hits hard,’ he said.
Jonathan Gold, vice president of the supply chain and customs policy at the National Retail Federation, the nation´s largest retail trade group, said the possible strike comes as the supply network continues to face challenges from ongoing Houthi attacks on commercial shipping that have essentially shut down the use of the Red Sea and Suez Canal.
The uncertainty also comes during the peak of retailers´ holiday shipping season, which traditionally runs from July through early November. Many big retailers, anticipating a strike, started shipping their goods to U.S. distribution centers in June, and Gold noted that a majority of products are already in the U.S.
But retailers will have a hard time replenishing items and are incurring extra warehouse costs to store goods longer. Gold also noted that carriers are already announcing surcharges on containers to address potential disruptions.
FILE – Ship to shore cranes work the container ship CMA CGM Laperouse at the Georgia Ports Authority’s Port of Savannah, Sept. 29, 2021, in Savannah, Ga. (AP Photo/Stephen B. Morton, File)
The Toy Association, the nation´s leading toy trade group, was one of roughly 200 trade groups that sent a joint letter to President Biden earlier this month urging the administration to work with ILA and USMX to come up with a contract.
Greg Ahearn, its president and CEO, noted that a strike would happen at an extremely critical time for toy sellers and makers – up to 60 percent of a toy company´s annual sales come during the fourth quarter.
The holiday shipping window for the toy industry is anywhere from six to eight weeks and started in July, though some toy companies tried to ship earlier or add more toys to shipments, he said.
‘It hits many ways,’ he said. ‘From a consumer perspective, it starts with delays in availability and then starts to surface as product shortages within toys. At retail for the toy industry, it results in potentially higher prices based on scarcity and increased costs.’