Ikea, booze and bananas: Here's what a prolonged dock strike could pinch
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Dockworkers strike in a picket line outside of the Port of Houston Authority on October 01, 2024 in Houston, Texas. Photo: Brandon Bell/Getty Images
As thousands of dockworkers from major ports spanning Maine to Texas walk off the job to strike, consumers could feel the effects when they shop.
Why it matters: A protracted contract battle between the International Longshoremen's Association and the United States Maritime Alliance could strain supply chains ahead of the holiday shopping blitz just as slowing inflation had consumers weighing spending more.
Driving the news: The work stoppage affects ports that handle more than half of the cargo shipped to the U.S. from around the world.
- While the strike itself involves around 45,000 workers across the ports, more than 105,000 others could temporarily lose their jobs, per an Oxford Economics estimate.
- A strike could cost the economy $3.8 billion to $4.5 billion per day, according to a JPMorgan analysis.
The latest: The White House said Tuesday that President Biden and Vice President Kamala Harris have been briefed that the impacts on consumers are "expected to be limited at this time, including in the important areas of fuel, food, and medicine."
The big picture: While some companies redirected goods to the West Coast or shipped products early in preparation for a strike, some industries may not be able to dodge the blow that would come with a prolonged strike.
- Jonathan Gold, vice president of supply chain and customs policy at the National Retail Federation, told Axios' Hope King a one-day shutdown of a port could mean anywhere from three to five days for recovery.
Perishables: Bananas, mangoes, meats
Perishable products may see the most immediate effects of a strike, as grocery stores aren't able to hold as many items that will unavoidably expire.
- According to the American Farm Bureau Federation, the affected ports handled 75% of the country's banana imports.
- The AFBF also noted that the strike could slow exports for producers — such as soybean farmers, who are expected to harvest a record crop.
- Some sellers are considering moving produce via plane rather than by sea to avoid their products spoiling if they're stuck on a ship, but expensive air rates and smaller loads could lead to price increases.
The Department of Agriculture notes that non-containerized bulk items, like grains, would not be affected and says it does not expect significant changes to prices or availability of food products.
- For poultry and meat items, it says storage space and redirection of products to alternative markets can "alleviate some of the pressure."
Alcohol
Beer, wine and spirits, though they perish less quickly than fruits, could also be impacted.
- John Wrenn, the chief operating officer at an alcohol distributor in New York, told the New York Times the company imports over 2,000 containers per year through the Port of New York and New Jersey, one of the busiest in the country.
- According to the American Farm Bureau, 80% of imported beer, wine, whiskey and scotch arrives to the U.S. in containers at East and Gulf Coast ports.
Car, auto products
Some foreign automakers are turning to air freight to mitigate the impacts of the port closures, where thousands of cars arrive every day, according to Kelly Blue Book.
- Like other industries, they've also shifted shipments to West Coast ports.
- But as noted by Oxford Economics, the port strike "would spell trouble for European auto producers" given the trade route through the Atlantic.
- European manufacturers, experts say, may face more hurdles than companies shipping from Asia.
Zoom in: The Port of Baltimore, which was temporarily closed earlier this year in the wake of the Francis Scott Key Bridge collapse, is the No. 1 automobile port in the country.
While exporters of durable goods don't face the same time crunch as those of perishable goods with a tight expiration date, tires and other products could still be stuck at ports amid the strike, straining the industry.
Retail goods
Walmart, Ikea, Samsung and other major retail brands are among the largest importers over the past year through the impacted ports.
- Beyond the added costs from possible shortages in inventory, retailers will likely have to pay inflated warehouse, shipping and trucking bills.
- In anticipation, many retailers rushed shipments months ahead of peak holiday shopping.
The bottom line: A shutdown lasting just a few days likely won't be felt by most people — but a prolonged stoppage could cause broader economic impacts.
- And the two sides, the ILA and the United States Maritime Alliance, are still far apart on pay and automation provisions, Axios' Emily Peck reports.
Go deeper: Why East and Gulf coast ports strike could push up consumer prices
