Costco Takes Multiple Steps to Prepare for US Port Strike, According to Reuters

U.S. retailer Costco Wholesale is proactively preparing for potential strikes next week at East Coast and Gulf of Mexico ports, according to the company’s chief executive.

To mitigate possible disruptions, Costco is implementing various contingency measures, such as pre-shipping products to ensure timely access to holiday goods and considering alternative port routes, as noted by CEO Ron Vachris during the company’s fourth-quarter earnings call.

Concerns are mounting among companies reliant on ocean shipping as members of the International Longshoremen’s Association, numbering around 45,000, may strike on October 1, possibly shutting down 36 ports that handle over half of U.S. ocean trade for goods like bananas, meat, prescriptions, auto parts, construction materials, and apparel.

If a strike occurs, it could lead to significant delays and increased costs that may adversely affect the U.S. economy in the run-up to the presidential election, complicating already strained global shipping networks and prompting higher consumer prices over time.

Vachris stated, “We’ve cleared the ports, we’ve pre-shipped. We’ve taken several measures to ensure that holiday goods arrive on time and are considering alternate plans to transport goods through different ports if necessary.” When asked about the early importation of goods, he acknowledged that they have undertaken a variety of strategies and remarked on the potential for disruption, noting that the extent of the impact remains uncertain until further developments unfold.

A prolonged strike could result in shortages of familiar staples like bananas, coffee, and cocoa, likely causing grocery prices to rise over time. Additionally, it could lead to lost export opportunities for crucial agricultural products, including beef, pork, chicken, and eggs.