Retailers and manufacturers are seeking to mitigate a potentially multibillion-dollar hit if members of the International Longshoremen’s Association go on strike beginning Oct. 1 at 13 of the nation’s major East Coast and Gulf Coast ports.
The contract between the ILA and the United States Maritime Alliance, which negotiates on behalf of management of the ports, terminals and shipping lines, is due to expire at midnight on Sept. 30. The contract covers 25,000 workers and ports stretching from Boston to Houston, the ILA said.
Billions of dollars worth of imported goods, from cars and light trucks to electronics to food, clothing, jewelry and agricultural products come into the U.S. through East Coast and Gulf Coast ports.
Members of the National Retail Federation (NRF) have been concerned about the potential for the strike for months, according to Jonathan Gold, NRF vice president of supply chain and customs policy.
“Many have taken steps to mitigate the potential impact by bringing in products earlier and frontloading the peak shipping season or by shifting products back to the West Coast,” Gold wrote Tuesday on the NRF website. “Imports at U.S. ports … have been at or above 2 million twenty-foot equivalent units since April, and September is expected to see 2.31 million TEU — import levels not seen since 2022.”
Gold said a strike also has the potential to disrupt retailers stocking up for the holiday season, as well as manufacturers and farmers relying on raw materials to keep operations moving.
“For retailers, that means holiday shipments might not arrive on time. Manufacturers might not receive parts, materials and supplies needed for production, which will lead to assembly lines shutting down. And farmers won’t be able to get their products to overseas markets, which could lead to lost sales,” Gold said.
Major ports such as Savannah, Georgia, and Houston bring in tons of materials for U.S. manufacturers, such as auto parts, heavy machinery, steel, lumber and other goods.
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Officials with the National Association of Manufacturers (NAM) said a prolonged strike could be devastating to the sector.
“Any disruption resulting from the United States Maritime Alliance and the International Longshoremen’s Association negotiations would deal an immediate blow to the manufacturing supply chain,” Christopher Netram, NAM’s managing vice president of policy, recently told CNBC. “A work stoppage at East Coast and Gulf Coast ports would upend logistics for U.S. businesses and hinder the movement of goods upon which millions of Americans depend. Costs will rise and manufacturing jobs will be lost if parts and supplies don’t arrive on time.”
The labor battle has already impacted global logistics providers and transportation operators, said Paul Brashier, vice president of drayage and intermodal at ITS Logistics.
“The U.S. East Coast and Gulf Coast ports handle billions of dollars in trade monthly and about 43% of all U.S. imports,” Brashier said in ITS Logistics’ U.S. Port/Rail Ramp Freight Index for September. “As we wait for the negotiations to come to a close, industry professionals should keep in mind that we will see a few weeks of elevated demand for inland dray, rail congestion, and other operational issues in September as containers make their way through the North American supply chain.”