“This couldn’t have come at a worse time”: Exporters brace for port strike delays
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“This couldn’t have come at a worse time”: Exporters brace for port strike delays
Thursday marks Day 3 of a strike at 36 ports along the Eastern Seaboard and Gulf Coast. About 45,000 port workers are demanding higher pay and protections against job disruptions caused by automation.
This country is the world’s biggest importer, so a prolonged strike could cause some serious disruptions to this economy. But we’re also the world’s second biggest exporter. So the port work stoppage could have a big impact on industries that rely on East and Gulf Coast ports to get their products to overseas markets.
One industry that’s bracing for impact is agriculture.
“This couldn’t have come at a worse time,” said Naomi Blohm, a senior market adviser with Total Farm Marketing.
We’re in the middle of harvest season, she said, a time when American farmers sell soybeans, cotton, nuts and other agricultural products to the rest of the world.
“Because usually the prices are cheaper for other countries to buy our products, because this glut of harvest is coming to the market,” she said.
Blohm said a lot of farmers, especially in the Southeast, rely on East and Gulf coast ports.
“And now, if this strike lasts for a long time, it could be something where those farmers are told, ‘Well hey, we don’t want your product right now, so store it at home,'” she said.
The longer the strike goes on, storing all of those agricultural products starts getting pretty costly, said Meagan Schoenberger, senior economist at KPMG.
“Because of the propensity for disease, for pests, things like that, so you don’t want to store these things for very long,” she said.
Other big U.S. exports that could be affected include chemicals, machinery and electronics.
“Certainly aircraft. Helicopters. Engines — big engines, like, those huge ones you put in semis,” said Emily Blanchard, an economics professor at Dartmouth College and former chief economist at the State Department.
Blanchard said East Coast ports handle a lot of pharmaceutical exports too.
“Almost half of those exports, in 2022 anyway and on average, they’re to Europe,” she said. “And so these are East Coast or Atlantic trade, if you think about it that way — they’re heavily exposed to this dockworker shock.”
If the strike continues for a while, exporters will probably start looking for other options, said Woan Foong Wong, an economics professor at the University of Oregon who studies transport networks.
“Maybe some of these goods could get moved over to the rail network, and then on to the West Coast ports,” she said.
But Wong said things get more complicated when entire industries start rerouting their supply chains to the West Coast.
“The West Coast ports are really busy ports, they’re very large ports, there’s a lot of ships coming in and leaving already. And so the added traffic is certainly going to increase the level of congestion,” she said.
That could mean more delays for exports and imports and higher costs for consumers.
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