:max_bytes(150000):strip_icc()/GettyImages-2175283586-82ae2d1e97fc4c8da7f0064bb60831bd.jpg "How the Ongoing US Port Strike Could Affect You")
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KEY TAKEAWAYS
- The International Longshoremen’s Association (ILA) members walked out this week, seeking higher pay and labor protections against automation from the United States Maritime Alliance (USMX).
- As ports from New England to Texas are shut down, the country will not receive as many imports, disrupting major supply chains and causing an increase in product prices.
- Although many retailers made preparations in anticipation of a strike, shoppers may still have a hard time finding products, from car parts to agricultural products to holiday presents.
U.S. dockworkers in ports from New England to Texas are striking, which could mean higher prices and fewer options for American shoppers.
The International Longshoremen’s Association (ILA) members began their strike at midnight Tuesday. The dockworkers are seeking higher pay and labor protections against automation from the United States Maritime Alliance (USMX), which represents large shipping lines.
The ports affected by the strike handle more than 68% of the country’s imports, likely leading to major supply chain disruptions that could increase prices at the grocery store.
Supply-Chain Disruptions May Restart Inflation, Stall Rate Cuts
The ILA strike comes two weeks after the Federal Reserve pumped the brakes on its fight against inflation. The central bank’s preferred inflation gauge fell 2.2% in August and the Fed subsequently cut its influential interest rate.
However, some economists think the strike could interrupt the Fed’s progress on inflation and cause it to rethink cutting rates further this year.
The strike will increase holiday retailers’ shipping rates and transportation expenses, which companies could pass on to consumers, raising prices.
Grocery prices, in particular, could rise as agricultural shipments are delayed, economists at BMO wrote Tuesday. For example, grain shipments will be delayed, and about 75% of all bananas imported into the U.S. come through East or Gulf Coast ports.
Retailers May Not Have Everything on Your Shopping List
As the holidays approach and retailers receive fewer products than normal, you may not be able to find everything on your holiday shopping list.
Some retailers prepared for supply chain interruptions related to the strike. Some imported products earlier in the summer or redirected shipping lines to the West Coast in preparation.
Costco Chief Executive Officer Roland Vachris said on a company conference call Thursday that the box store has pre-shipped many items and looked at alternative plans in anticipation of the strike.
However, ports where shipments are being redirected may be unable to fully take on the additional volume, said Moody Analytics, resulting in a shortage of some products.
Vehicles and auto parts will likely be the most affected, as European-made automobiles typically ship through East Coast ports.