A strike by dockworkers could see shortages and higher retail prices in the US

NEW YORK (AP) — U.S. ports from Maine to Texas closed Tuesday as unions representing about 45,000 dockworkers went on strike For the first time since 1977.

A prolonged shutdown could raise commodity prices across the country and potentially lead to shortages and price hikes at retailers large and small as the holiday shopping season — as well as a tight presidential election — approaches.

“First and foremost, we can expect delays in the market. And those delays really depend on what the products are and the priorities at the ports and how quickly things move,” said Mark Baksa, president of the Council of Supply Chain Management Professionals.

What are the problems in the dockworkers' strike?

The International Longshoremen's Association is demanding significantly higher wages and a total ban on them Automation of cranes, gates and container-moving trucks which are used in loading or unloading cargo at 36 US ports. These ports handle about half of the countries' cargo from ships.

The agreement between the ILA and the United States Maritime Alliance, which represents the ports, expired on Tuesday Talks reported some progress late Monday, but the union went on strike anyway.

The union's opening offer was a A 77% salary increase over the six-year life of the contractPresident Harold Daggett said it was necessary to account for inflation and small increases for the year. ILA members make a base salary of about $81,000 per year, but some can earn more than $200,000 annually with substantial overtime.

On Monday evening, the alliance said it had increased its offer by 50% over six years and it pledged to keep automation restrictions from the old contract. The coalition also said their offer tripled employer contributions to retirement plans and strengthened health care options.

Which ports are affected?

Any port can handle any type of cargo, some ports specialize in handling cargo for a particular industry. Ports affected by the shutdown include Baltimore and Brunswick, Georgia, the top two busiest auto ports; Philadelphia, which prioritizes fruits and vegetables; and New Orleans, which handles mainly 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 US economic health, President Joe Biden, under the 1947 Taft-Hartley Act, can seek a court order. 80 days cooling off period. This will suspend the strike.

But Biden, during an exchange with reporters on Sunday, said “no” when asked if he planned to intervene to plan a potential job shutdown affecting East Coast ports.

“Because it's collective bargaining, I don't believe in Taft-Hartley,” Biden said.

How will it affect consumers?

Strikes can last for weeks or months. If the strike is resolved in a few weeks, consumers likely won't notice any major shortages of retail goods. But a strike that lasts more than a month could lead to shortages of some consumer goods, even though most holiday retail goods have already arrived from overseas. Shoppers can see higher prices on a wide array of products, from fruits and vegetables to cars.

Retailers are making contingency plans

Since Major supply chain disruptions in 2021 Because of pandemic disruptions, retailers have adapted to supply chain disruptors as the “new norm,” said Rick Haas, owner of a mini-chain of Patina gift shops in and around Minnesota's Twin Cities.

“The best approach for Patina is to secure orders early and make sure we have the products in our warehouse and backroom to ensure we are stocked with key products,” says Haas.

Daniel Vasquez, who owns Dynamic Auto Movers in Miami, which specializes in importing and exporting vehicles, especially vehicles that take longer to ship, expects a strike.

He stopped relying on a single port or shipping partner and expanded his relationships with smaller ports and shipping companies that could bypass congested areas.

“This move gives us an edge – having a backup partner in place means we can reroute shipments efficiently if a strike gets tough,” Vasquez said.

How will the strike affect holiday shopping?

Jonathan Gould, vice president of supply chain and customs policy at the National Retail Federation, the nation's largest retail trade group, said the strike comes as supply networks continue to face challenges. Houthi attack on commercial ship which essentially stopped the use of the Red Sea and the Suez Canal.

Uncertainty over the supply chain is escalating Holiday shipping season For retailers, that traditionally runs from July to early November. Many major retailers, anticipating a strike, began shipping their products to U.S. distribution centers in June, and Gould said most of the ordered products were already in the U.S.

But retailers will have a harder time replenishing items and incur additional warehouse costs to store products longer. Gould also noted that carriers are already announcing container surcharges to address potential disruptions.

The Toy Association, the nation's leading toy trade group, was one of nearly 200 trade groups that sent a joint letter to President Biden earlier this month urging the administration to work on an agreement with the ILA and the USMX. Greg Ahron, its president and CEO, noted that a strike would occur at a critical time for toy sellers and manufacturers — up to 60% of a toy company's annual sales come in the fourth quarter.

The holiday shipping window for the toy industry is anywhere from six to eight weeks and starts in July, although some toy companies have tried to ship earlier or add more toys to shipments, Ahern said.

“It hurts in so many ways,” he said. “From a consumer perspective, it starts with delays in availability and then product shortages in toys. In the case of toy industry retailers, this could result in potentially higher prices based on scarcity and increased costs.”

___

AP writers Tom Krisher in Detroit and Stephen Groves in Dover, Delaware contributed to this report.