Lydia Hu reports on “Mornings with Maria” about a possible port strike ahead of the holidays.
The threat of port strikes on the East Coast and Gulf of Mexico is sending shockwaves through supply chains and raising concerns about rising inflation.
“Goods shipped across the country will not only be delayed, but will also be more expensive — for example, early winter and holiday apparel — to ship,” George Kochanowski, CEO of logistics company Stackson, told Fox Business.
Kochanowski continued: “If goods are put into containers, where do those empties go? And who pays for the costs of storing, managing and redeploying them? All of these costs are factored into the selling price of the goods.”
The International Longshoremen's Association (ILA) is negotiating on behalf of 45,000 longshore workers at more than 30 ports from Maine to Texas that handle about half of the U.S.'s seaborne imports. The association has warned that its members are prepared to stop work if a new contract is not reached by an Oct. 1 deadline.
Port strike could have 'devastating' impact on economy, retail group says
The problem is that this is happening during the most crucial time of the year for retailers, who told FOX Business that if a new labor agreement isn't negotiated by the end of the month, it could have a “devastating impact” across the US economy.
A container ship docked at the Port of Miami, Florida, on December 27, 2012. (Joe Raedl/Getty Images)
Jim Gillis, Pacific president of IMC, a national trucking company that operates at the port, said he is seeing “a number of issues related to the surge in cargo, primarily port congestion and a shortage of pool chassis.”
It was something they hadn't seen in the past few months.
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A longshoreman talks next to stacks of containers at the Port of Baltimore, Maryland, on October 14, 2021. (Jim Watson/AFP/via Getty Images)
“As truckers, we are seeing drivers wait significantly longer and in some cases being turned away due to congestion, which is directly correlated to increased volumes shifting to the West Coast,” Gillis continued, noting that freight volumes on the West Coast have increased by 18 percent.
The ports of Los Angeles and Long Beach have seen a surge in cargo volumes linked to the possible strike, but Gillis noted that shippers were making decisions to move cargo to the West Coast at least six to 10 weeks before the cargo arrived there.
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“Right now, shippers looking to relocate their cargo are a little behind the times and haven't necessarily found a solution that will solve their problem quickly and economically,” he added.
Still, the current increase in infections is “nowhere near the levels experienced later in the pandemic and we're not yet close to an 'emergency' situation,” Gillis said.
Joe Perez, senior vice president of Goya Foods, said the company has been actively preparing for a possible strike over the past few months, including increasing safety stock, shipping Christmas goods earlier than usual and adding additional shipping companies.
A Norfolk Southern Railroad train in East Palestine, Ohio, February 14, 2023. (Angelo Merendino/Getty Images)
Perez said over the past two weeks, the company has been rapidly moving cargo off the wharves, increasing receiving times and adding trucking services.
Meanwhile, Norfolk Southern Railroad, which operates about 20,000 miles of track in 22 states, said it was keeping its supply chain moving.
Norfolk Southern Railway told FOX Business, “We are working with our customers to leverage our network and partnerships with ocean carriers, short line railroads and western Class 1 railroads to minimize disruptions and keep essential supplies moving as efficiently as possible.”
