US port labor dispute threatens product range By Reuters

(Reuters) – About 45,000 union workers could walk off the job at U.S. East and Gulf Coast seaports on Oct. 1, cutting off vital trade arteries just weeks before the nation’s presidential election.

A strike would hit 36 ​​ports that handle about half of US ocean imports. This could affect the availability of a range of goods from bananas to clothing to cars shipped by container, while creating backlogs of several weeks at ports. It could also cause increases in shipping costs that could be passed on to voters already frustrated by housing and food inflation, according to logistics experts.

WHAT IS THE PROBLEM?

The International Longshoremen’s Association (ILA), which represents workers at 36 ports from Maine to Texas, and the US-based trade union Maritime Alliance appear to have reached an impasse over wages. The current six-year deal expires at midnight on September 30.

A strike at all ports on the East Coast and Gulf of Mexico would be the first for the ILA since 1977.

The White House said it was not trying to help negotiate a deal, as it did last year during West Coast talks, and a Biden administration official said the president would not use his federal powers to block a strike.

CARS, MACHINES AND PARTS

Ports in the negotiating group handled $37.8 billion worth of vehicle imports during the 12 months ending June 30, 2024, according to S&P Global Market Intelligence. The Port of Baltimore, Maryland, leads the nation in car shipments.

Auto parts are also a key import on the East Coast and Gulf of Mexico, with shipments from Europe more difficult to reroute than those from China, logistics experts said.

Ports also lead the U.S. in shipments of machinery, fabricated steel and precision tools, reaching $97.4 billion, $16.2 billion and $15.7 billion, respectively, S&P Global data showed Market Intelligence.

AGRICULTURE

Three-quarters of the nation’s banana imports from countries such as Guatemala and Ecuador land in East Coast and Gulf ports, said Jason Miller, acting chairman of Michigan State University’s department of supply chain management.

A strike would also affect containerized exports of soybeans, soybean meal and other products and have a significant impact on refrigerated or frozen meat and eggs, said Mike Steenhoek, executive director of the Soy Shipping Coalition.

The $18 billion annual U.S. beef and pork export market and the $5.8 billion poultry and egg export sector rely on refrigerated containers that cannot stand inactive for a long time.

About 45 percent of all waterborne U.S. pork exports and 30 percent of U.S. beef exports were shipped through East Coast and Gulf Coast ports in the first seven months of this year, the carrier said. word of the US Meat Export Federation, Joe Schuele.

More than a quarter of all U.S. egg and egg product exports and about 70 percent of all poultry exports are shipped from East Coast and Gulf Coast ports, according to Customs and Export Council data of Eggs and Poultry of the USA.

CONSUMER GOODS AND ENERGY

Retailers account for about half of all container volumes. Many US retailers have already rushed to ship holiday goods.

The ports that would be affected by a potential strike bring in more than half of the nation’s knitted and non-knitted garments, valued at $32.8 billion combined, as well as furniture valued at $23.4 billion, according to S&P Global Market Intelligence.

Although the Gulf Coast ports of Houston and New Orleans are major oil and gas shipping hubs, those cargoes would be largely unaffected by a strike involving more labor-intensive containerized cargo. The same is true of coal exports from Norfolk, Va., experts said.

HIGHER COSTS, BIG DELAYS

In broad terms, a strike would increase costs for transport, also imposing long delays.

The top five ports in the negotiating group – New York and New Jersey; Savannah, Georgia; Houston; Norfolk; and Charleston, South Carolina — handled more than 1.5 million 20-foot equivalent units (TEUs) valued at $83.7 billion in August, according to John McCown, senior fellow at the Center for Maritime Strategy. About two-thirds of this cargo was in, while the rest was out, he said.

The trade disruption from a work stoppage would begin immediately, driving rates higher and impacting the US economy, logistics experts warned.

Analysts at Sea-Intelligence, a shipping consultancy based in Copenhagen, estimated it could take four to six days to clear the backlog from a one-day strike.

Maersk, one of the largest shipping providers and a member of the employers’ group, warned that a one-week stoppage could require up to six weeks of recovery time, “with significant delays getting worse with each passing day “.