If the union strike that has shut down U.S. ports from Maine to Texas stretches on for two or three more weeks, people may start to be see the overt impacts in the form of shortages of certain items, according to an expert who studies supply chains.
It could cause near-term shortages of food items such as fresh fruit, vegetables, meat and poultry. Automobiles and electronics could also be affected.
“The problem is once a port is shut down, you don’t just push a button and it starts back up again,” said Robert Handfield, professor of supply chain management at North Carolina State University. “You have to disentangle all your containers, find out what your shipments are and start up work again.”
The union representing about 45,000 dockworkers went on strike Tuesday for the first time since 1977. Workers began walking picket lines near ports all along the East Coast.
The International Longshoremen’s Association is demanding significantly higher wages and a total ban on the automation of cranes, gates and container-moving trucks that are used in the loading or unloading of freight cargo at 36 U.S. ports.
“One of the concerns is, if it stretches on too long, it could actually start to impact holiday shipments,” said Handfield. “If you don’t have shipments coming in, you’re not going to have inventory on the shelf, and you’re going to have a lot of kids that are not happy on Christmas morning.”
A lengthy shutdown could raise prices on goods, in part because companies may need to divert shipments to the West Coast.
“That can add up to $1 to $2 million per boat load per shipment,” Handfield explained. “That gets immediately transferred onto the container cost and the product cost, so we could see price increases on the order of 5-10% just out of the gate.”
Many big retailers, anticipating a strike, stocked up and started shipping their goods to U.S. distribution centers earlier than normal. But small and medium-sized businesses are more likely to be negatively impacted in the near term.
“If they have a container that’s at sea or somewhere in a port and they can’t find it, it could be weeks before they get their inventory,” said Handfield. “That’s inventory they’ve paid for … and they need to turn that around quickly.”
“They’re definitely worried right now,” he added.
The Associated Press contributed to this report.
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