About 50,000 union longshoremen walked off the job at East Coast and Gulf Coast ports at just after midnight on Tuesday (Oct. 1) after failing to reach an agreement with ports ownership on a new contract, report a variety of publications, including CNBC.com. The walkout – which centers mainly on higher wages and protections against automation – is the union’s first strike since 1977, and it could eventually impact retailers at the shelf level.
Logistics experts have told CNBC in recent months there has been an exodus of cargo from the East to West Coast, and companies moved up orders for peak shipping season due to the strike risk. Both economists and logistics executives say the impact of the strike depends on how long the work stoppage lasts.
“A disruption of a week or two will create some backlogs but the broader consequences will be minimal outside of a handful of very port-reliant areas, including Savannah,” Adam Kamins, economist at Moody’s Analytics told CNBC. “But anything longer will lead to shortages and upward price pressures,” he said.
Steve Lamar, CEO of the American Apparel & Footwear Association, said these closed ports are critical for the retailing industry. In 2023, the East and Gulf coast ports accounted for 53% of all U.S. apparel, footwear and accessories imports, he said, amounting to more than $92 billion in value.
“The clock is ticking away,” Lamar told CNBC. “Each strike day yields five more days of disruption as our consumer-driven economy gets snarled in port backlogs right as we hit the heavy holiday shopping season. Both sides need to get back to the table and the administration must be ready to use all of its tools to make sure this happens. Reaching a fair, long-term, and sustainable deal is job No. 1 for all parties.”
As of this posting, no new talks have been scheduled between the two sides in the strike.
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