US Port Labor Dispute Poses Threat to Product Availability – Reuters

Some 45,000 union workers may engage in a strike at seaports along the U.S. East and Gulf Coasts on October 1, potentially disrupting crucial trade routes just weeks before the presidential election.

An analysis from JPMorgan suggested that such a strike could result in daily losses of $5 billion for the U.S. economy. The work stoppage could impact 36 ports that account for about half of U.S. ocean imports, leading to shortages of products ranging from bananas to clothing and automobiles. It could also create significant backlogs at the ports and increase shipping costs, further frustrating consumers who are already grappling with rising housing and food prices.

The International Longshoremen’s Association (ILA), which represents workers from Maine to Texas, has reached a standstill in negotiations over pay with the United States Maritime Alliance. Their current six-year contract expires at midnight on September 30. If a strike occurs, it would mark the first such action by the ILA since 1977.

The White House has indicated it will not intervene to help facilitate a resolution, unlike its involvement in previous negotiations on the West Coast. A prolonged strike could result in widespread shortages and increased costs across multiple sectors.

In the automotive industry, ports affected by the contract handled vehicle imports valued at $37.8 billion in the last year, with the Port of Baltimore leading the nation in car shipments. Furthermore, the East Coast and Gulf ports are critical for auto parts and machinery, collectively handling goods worth over $97 billion.

Agricultural exports would also be significantly impacted, with about 14% of U.S. waterborne agricultural exports at risk. The potential economic loss from agricultural exports could reach over $1.1 billion per week. Major agricultural imports, such as bananas from Central America, and key exports like soybeans and pork, could face disruptions.

The ports in question also manage the majority of containerized pharmaceutical products, which are vital for public health. A strike could hinder the timely delivery of lifesaving medications, with notable pharmaceutical import entries occurring at the ports in Norfolk, Virginia, and Charleston, South Carolina.

Consumer goods, especially those anticipated for the holiday shopping season, could see delays and increased costs, as nearly half of all container volumes handled by these ports include retail shipments. Energy exports, particularly oil and gas, are expected to remain largely unaffected due to differing cargo types, although military cargo and cruise operations would continue.

Overall, a strike would likely lead to higher shipping costs and significant delays, with experts warning that trade disruptions could begin immediately, causing ripple effects throughout the economy. Analysts estimate that even a short work stoppage could result in a backlog that takes days or weeks to resolve.