An East Coast port strike could coincide with holiday shipping and shopping
An East Coast port strike could coincide with holiday shipping and shopping
At ports from Maine all the way down to Texas, 45,000 dockworkers are looking for a substantial pay raise and protections against automation. But negotiations between the International Longshoremen’s Association union and port employers have stalled ahead of an end-of-month deadline. As a result, we’re likely looking at an East Coast port strike just in time for the holiday shopping season.
More than half of U.S. imports arrive via the East Coast and Gulf Coast, said Mia Ginter, who follows ocean freight at freight transport company C.H. Robinson, including lots of cargo from Asia.
“Which means a lot of retail goods, a lot of electronics,” she said. Toys, clothes, gadgets — the kind of stuff we buy one another around the holidays.
But it might have to find another way into the country, said Alan Murphy, CEO of shipping research firm Sea-Intelligence. There are a few options, he said, “but the ship has sailed for most of them.”
Some retailers planned months in advance to redirect freight through the West Coast. But those supply chains can only absorb so much.
Other retailers planned ahead by ordering holiday inventory early, so it would get to East Coast ports before a potential strike. “So we saw in May and June and July, we saw significantly higher volumes than we would normally see,” Murphy said.
But stocking up comes with risk, said Steve Scales, managing director at AlixPartners. “The further out they are having to make buys, the more they are reliant on forecasts that are far out as well,” he said.
In other words, it’s tough to guess in June what holiday shopping lists will look like in December.
Because of all that preparation, Ginter at C.H. Robinson doesn’t expect empty shelves at big-box stores. But she said it matters how long the ports would be closed down.
“For every week of a strike, we would expect at least one month of disruption and chaos and backlogs,” she said.
That chaos won’t be felt evenly across the retail economy, said Terry Esper, professor of logistics at Ohio State University.
“If there is a concern that I have, it would definitely be more for the medium-sized enterprises and of course, small businesses,” he said.
Businesses that have less flexibility and capital to plan ahead.
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