Costco Wholesale and other U.S. retailers have been pre-shipping and stocking ahead of Tuesday's possible port strike.
A port strike by longshoreman workers along the East and Gulf coasts would create economic chaos with far reaching impacts to businesses, consumers and even your kitchen table as grocery aisles could be bare of popular fruits like bananas within weeks.
According to news source , Costco's CEO Ron Vachris said yesterday that contingency plans were in place, "We've cleared the ports, we've pre-shipped. We've done several different things that we could to get holiday goods in ahead of this time frame, and looked at alternate plans that we could execute with moving goods to different ports and coming across the country if needed."
The International Longshoremen's Association (ILA) represents about 45,000 members working under the shipping industry group US Maritime Alliance (USMX) contract. USMX represents the major shipping lines, all of which are foreign-owned, terminal operators and port authorities.
The negotiations between the ILA and USMX have been stalled for months.
Retailers have been shipping months in advance, expediting holiday goods orders ahead of the possible port strike, signaled by a surge in container imports and freight rates in July and August according to news reports .
A strike on Oct. 1 would effectively shut down 36 ports along the East and Gulf coasts, causing shortages in the supply chain and driving up prices on a host of goods for American consumers.
What is at the heart of the labor dispute?
Union workers at ports in the East and Gulf coasts earn a base wage of $39 an hour after six years on the job compared to reports that West Coast union workers, which make $54.85 an hour.
The International Longshoremen's Association is demanding a 77% pay raise increase over six years and more restrictions and bans on the automation of cranes, gates and container movements used in loading or unloading of cargo.
According to news source s, USMX responded with an offer of 40% in wage increases, but the union rejected it, calling the counter “a joke.”
There hasn’t been an ILA strike against these ports since 1977.
What products would be impacted by a port strike?
A port strike would impact vehicle imports, auto parts, machinery, fabricated steel and precision instruments.
The Port of Baltimore, Maryland leads the nation in car shipments.
Agricultural impacts such as the imports of bananas and fruits, coffee and cocoa or exports of soybeans and soybean meal would be felt. However, even more significant impacts would be felt on the chilled or frozen meat products and eggs, which require refrigerated containers that cannot sit for very long.
The Port of Wilmington in Delaware is the leading port for Dole Fresh Fruit Co. and Chiquita Fresh North America, getting about two-thirds of all banana imports in the U.S.
“Any fruit that arrives after 1 October will be condemned to the trash can,” Peter Kopke Sr. of Port Washington-based importer Kopke Fruit told The Orange County Register . “And all of the people who have invested in that business will lose a fortune.”
Knitted and non-knitted apparel, furniture, plywood and pharmaceutical products and year-end holiday items would be among the endless list of products impacted by the strike.
Officials estimate that it could take anywhere from four to six days to clear backlog from just a one-day strike, and weeks or more if the strike stretches one week.
This article originally appeared on NorthJersey.com: Costco and retailers preparing for U.S. port strike: empty shelves and price hikes
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