Port strike could derail supply chain, hike prices just in time for the holidays

Americans may face higher prices and product shortages this holiday season, not due to a global pandemic but because of a looming workers’ strike. As of Thursday, negotiations between the International Longshoremen’s Association (ILA) and the United States Maritime Alliance (USMX) have reached an impasse. If no agreement is reached, approximately 45,000 union workers at 36 East and Gulf Coast ports are set to strike on October 1, marking the first strike of its kind since 1977.

The potential strike threatens to disrupt the supply chain, causing shortages of various goods and increasing prices, especially for consumers already dealing with inflation in housing and food. These ports handle around half of the U.S.’s ocean imports, including critical items such as food, clothing, auto parts, vehicles, and holiday toys.

Strike could lead to higher prices across many sectors

Supply chain expert Greg Ahearn, CEO of The Toy Association, noted that the strike could lead to higher prices across many sectors, limiting the availability of holiday toys and other essential products. Diversification efforts, including shifting supply chains away from China and rerouting shipments through East Coast ports following West Coast delays, have only increased the potential impact of the strike.

Key products that could face shortages include seafood, electronics from Southeast Asia, pharmaceuticals, automobiles, and even bananas, as these items heavily rely on East and Gulf Coast ports for transportation. If no resolution is reached, the effects could be felt not only during the holiday season but well into the next year, as companies struggle to move products and keep prices stable.