Longshoremen on the East Coast and Gulf Coast have vowed to go on strike if a new contract is not reached by October, and experts say soaring prices and empty shelves could await consumers. I'm warning you that there is.
In fact, some experts say prices could rise before the end of the year, impacting goods during the crucial holiday season.
This dire situation occurred just as consumers were beginning to feel some relief from inflation.
The International Longshoremen's Association (ILA) is negotiating on behalf of 45,000 longshoremen at 30 U.S. ports from Maine to Texas, which collectively handle about half of the country's seaborne imports.
Members warned they were prepared to stop work if a new contract was not signed by the October 1 deadline.
“Retailers view this strike and the impending disruption as a self-inflicted wound on the U.S. economy,” the Retail Industry Leaders Association (RILA) said in a statement.
JPMorgan estimates that if a port is closed for one day, it will take about six days to clear the backlog.
Analysts expect the economic impact of the strike to be about $5 billion per day, according to a research note published earlier this month.
Retailers have contingency plans in place to minimize the impact, but “the longer the shutdown lasts, the harder it will be to implement them,” RILA said.
Multiple experts told FOX Business that these types of shipping and supply chain disruptions often lead to product shortages, which in turn leads to higher prices.
“If these strikes cause prices to rise, it will increase inflation and lead to further Fed There is a possibility that interest rate cuts may be delayed.” “This delay could ultimately impact consumer costs such as mortgages, auto loans and credit cards,” he added.
Sarson Logistics CEO Jason Fisk told FOX Business that shoppers “need to prepare for higher product prices by the first quarter of 2025, or sooner.” Ta.
“While importers are actively implementing strategies to manage these risks, these solutions often come at a high cost, which inevitably impacts consumer prices,” Fisk said. said.
Discretionary goods, particularly luxury and entertainment goods, are expected to be most affected because they are more price elastic, Fisk said.
The full impact of the strike remains unclear, but Fisk said “significant impacts” are expected, including “retail store out-of-stocks and factory slowdowns, especially in the lead-up to the busy holiday season.”
Retail out-of-stock is an industry term for an out-of-stock event when a product is no longer available for purchase.
