Costco says it’s ready for the onslaught on the US port

• Ports in the eastern United States could largely shut down operations if a maritime workers’ union goes on strike Tuesday.
• As the likelihood of a shutdown grew, retailers like Costco took steps to plan ahead.
• “We’ve taken as many preventative measures as we can to prepare,” CEO Ron Vachris said last week.

US ports on the East Coast and Gulf Coast could largely shut down as soon as Tuesday when North America’s largest maritime workers’ union goes on strike.

Retailers like Costco have taken steps to plan ahead as the likelihood of a shutdown has increased.

The International Longshoremen’s Association, which says it represents 85,000 members, said Sunday that a strike at dozens of facilities in 14 US ports is set to begin Oct. 1 as contract negotiations with the United States Maritime Alliance are deadlocked.

“The port strike is something we’ve been watching very closely for some time,” Costco CEO Ron Vachris said last week during the company’s fourth-quarter earnings call.

While the CEO acknowledged the strike “could be disruptive,” he said the company was preparing.

Vachris noted that Costco’s imports are primarily non-food products, which gives the company relatively more flexibility in adjusting strategy to anticipate the Oct. 1 deadline.

“We did a little bit of everything,” the Costco CEO said. “We cleared ports, pre-shipped, did as many different things as we could to get holiday goods before this time frame, and looked at alternative plans we could execute with moving goods into different ports. and coming through the country if need be.”

A key question Vachris and other experts are weighing is less whether a strike will happen, but how long it will last.

“I can’t tell you until we know the length and what might happen there, but it’s in our sights,” Vachris said. “Our buyers are all over the place. They’re watching it closely and we’ve taken as many precautions as possible to prepare for it.”

Supply Chain Management Association CEO Abe Eshkenazi told Business Insider that a prolonged shutdown could lead to months of delays in the flow of goods.

“The supply chain is inextricably linked, and as we enter the busiest shopping season of the year, businesses, retailers and consumers alike will feel the impact of a shutdown,” Eshkenazi said.

White House officials, including Transportation Secretary Pete Buttigieg, met with representatives of the United States Maritime Alliance on Friday in an effort to advance negotiations.

Dockworkers are seeking higher wages to address what they describe as “half a century of wage subjugation”, while the association representing the employers says it has been unable to schedule an in-person bargaining meeting with the union.