Longshoremen are striking from Maine to Texas, costing the U.S. economy as much as $5 billion a day, but raising questions about how the strikes will directly impact consumers. are.
Despite toilet paper shortages reminiscent of the early days of the pandemic, consumers shouldn't see anything out of the ordinary on grocery store shelves or in parking lots for the first few days.
“There's actually no reason to panic at this point,” said Margaret Kidd, program director and associate professor of supply chain logistics at the University of Houston. Houston is one of 14 major ports affected by the strike.
However, the longer this situation lasts, the more disruption there will be, and the possibility that prices will rise again after a period of declining inflation.
Jena Santoro, senior manager of global risk intelligence at supply chain risk management firm Everstream Analytics, said consumers have experienced disruptions in fresh produce, pharmaceuticals and auto parts in the week or two since the strike began early Tuesday morning. I think we might start seeing it.
Santoro said it would be about three weeks before broader disruption begins.
“Consumer goods and retail goods are the least likely to be really affected immediately, as retailers and importers have stockpiled about three to four weeks worth of inventory, so any disruption would be a result of a strike. Only if it lasts longer than this,” Santoro said.
Here's a closer look at how strikes can affect consumers.
The first week has little effect
Experts say consumers shouldn't expect disruption from the strike in the first week, but even if it ends abruptly, the resulting backlog could be felt for much longer. told The Hill.
Tony Peri, BSI's director of supply chain security and resilience, said there was “little to no immediate impact on consumers” for the first three days, but added that “a strike of this scale is completely It will take at least two weeks for the situation to resolve.” ”
Businesses have been preparing for this strike for months. Many may be able to receive their shipments early, take a detour through West Coast ports, or be willing to use more expensive air transport from Europe in the short term.
“Companies rely on pre-built inventories and are making adjustments to deal with initial disruptions,” said RELEX, group vice president of consumer packaged goods and manufacturing at supply chain planning solutions company RELEX. Madhav Dabha said.
“Perishables are the main risk area, but there are no major shortages yet,” Darba added.
There is a built-in delay in getting goods from the port container to the store shelf, which provides a short-term buffer.
“In any case, it takes a week or two for it to leave the port, get to the warehouse, and start being distributed, so there's a natural lag there,” said Campbell University Associate of History. Professor Sal Mercogliano said.
“We're probably going to see some congestion in the next few weeks. That's the big problem,” Mercogliano said. “That would cause the port to get a little bit stuck and it would be difficult to get the containers out.”
Perishable food and auto parts get stuck in 1-2 weeks
Congestion at ports could worsen in the first week or two of the strike, and consumers could start seeing fewer items, especially fresh produce and auto parts.
“Fresh produce, meat, seafood, and vegetables will start to see more pronounced disruption as refrigeration capacity is limited and these items are perishable. We may start to see an increase in the price of fresh produce,” Darva said.
Perishable food is transported in refrigerated containers, and Mercogliano suggested during the strike that “even the goods that are landed can start to spoil because the containers are not properly monitored.”
Santoro said these “time-sensitive supply chains” typically hold “about half of their inventory, with about one to two weeks worth of inventory before raw materials or parts arrive, so it's easy to avoid a strike.” “A prolonged period could sooner or later affect the auto industry and pharmaceuticals.” Delays may cause stockouts to begin to occur. ”
“Some medicines and health care products may also start to be affected, many of which may be transported by more expensive flights,” Peri said.
Coffee, champagne, cheese, etc. disappear in a month
Three to four weeks after the strike begins, just before the general election on November 5, consumers may begin to feel the full impact of the port strike.
“The flow of goods from ports to warehouses to distribution centers is backed up and you start to deplete what's in the warehouses and distribution centers. So you're starting to see shortages,” Mercogliano said.
The United States imports the overwhelming majority of its coffee, potentially leading to what Mercogliano described as a “nightmare scenario: Americans can't get their caffeine intake.”
The United States also imports large quantities of cheese and alcohol, which are in high demand ahead of the holiday season.
“Autumn tends to be a very busy season for champagne and spirits, so that could definitely be impacted,” Mr Kidd said.
According to the Distilled Spirits Council of the United States (DISCUS), in 2023, 43% of distilled spirits imports went through strike-affected ports. These ports exported more than three-quarters of U.S. spirits last year.
DISCUS, the industry association representing the spirits industry, calls this a “critical time for the spirits industry” as 20% of total spirits sales occur during the holiday season.
But it's not just coffee, champagne and cheese. After a month, “consumers will notice that everyday items are missing from store shelves,” said Darrin Miller, Sedgwick's national marine director.
And once the product hits store shelves, it will likely be more expensive.
“Imports are diverted to open ports, such as West Coast ports or non-labor ports, resulting in delays, longer voyages, and longer trucking and inland transportation. , the additional costs associated with rerouting could increase prices,” Miller said.
