The U.S. port strike is bad news for farmers, furniture stores — and just about everyone else
After months of negotiations ended without a deal, some 45,000 longshoremen went on strike Tuesday morning, promising to fight for “as long as necessary” to get what they demanded.
That’s likely to have major consequences for the broader U.S. economy; just about every industry relies on major ports across the East Coast and Gulf Coast to deliver shipments of equipment, food, and supplies each day. Ports and facilities handling approximately 51% of the nation’s overall port capacity are impacted by the walkouts, according to the Mitre Corporation.
As the International Longshoremen Association (ILA) neared a strike against the companies, port authorities, and terminal operators represented by the United States Maritime Alliance (USMX), cargo shipping companies began warning customers to adjust their plans ahead of the walkouts. Although some were likely successful, many companies are expected to be feeling the pain over the coming days.
“These people today don’t know what a strike is,” ILA President Harold Dagget said in a video last month as he warned his union could “cripple” the U.S. economy. “Everything in the United States comes on a ship.”
Read more: The massive U.S. port strike could have ‘devastating’ effects. Here’s what to know
As Dagget noted, the effects of the strike will likely be far-reaching, likely causing ripple effects in industries that rely on materials like steel and lumber. Almost 180 trade associations representing companies across a series of industries — including automakers, retailers, toymakers, and even firms selling Halloween costumes — have warned that the strike will be “devastating.”
Non-perishable goods are expected to languish at ports until action is taken. Tire companies like Goodyear and Michelin rely heavily on the affected locations, as are automakers like General Motors and Hyundai Motor Co. Bob’s furniture, Home Depot, and Ikea are also top importers at the East Coast and Gulf Coast ports, CNBC reported.
The agricultural industry is also expected to be one of the industries hit the hardest by the walkouts.
Grocers and restaurants will likely have issues getting fresh fruit and vegetables, especially from areas in Central and South America, the longer that the strike persists. Seventy-five percent of the U.S.’s bananas, or more than 3.8 million metric tons, arrive at ports where the ILA works each year, according to the American Farm Bureau (AFB).
That’s in addition to almost 90% of imported cherries, 85% of canned food, 82% of hot peppers, and 80% of chocolate. A majority of the nation’s imports of beer, wine, whiskey, scotch, and rum also arrives in containers at the ILA’s ports, along with more than 100 other categories of food.
The walkouts will also effect the companies shipping products out of the country. Some 30% of U.S. waterborne agricultural exports, which collectively accounts for three-quarters of total U.S. agricultural exports by volume, are expected to be disrupted, according to the AFB.
“[N]early 80 percent of waterborne exports of poultry leave East Coast ports, 56 percent of raw cotton, 36 percent of red meat, 30 percent of dairy products, and even six percent of soybeans, all go through those ports through containerized exports,” Daniel Munch, an economist at the AFB, said last week.
But, at this point, it’s tough to say exactly how much damage the strikes will do to the broader global economy, or even the U.S. alone. Estimates vary from as low as $540 million per day, according to The Conference Board, to up to $5 billion per day, according to J.P. Morgan. As many as 100,000 jobs are expected to be impacted, Oxford Economics said last month.
“It would be unconscionable to allow a contract dispute to inflict such a shock to our economy,” Suzanne Clark, the president of the U.S. Chamber of Commerce, said in a letter to President Joe Biden on Monday. “[The ports] are also critical to many small businesses including trucking, restaurants, and others that rely on these ports for their livelihood.”
