The strike could affect chilled or frozen meat, eggs and soybeans
27 September 2024
4 minute read
Some 45,000 union workers could walk off the job at seaports on the US East and Gulf Coasts on Oct. 1, cutting off vital trade arteries just weeks ahead of the nation’s presidential election, reported Reuters.
A JPMorgan analysis projected that a strike could cost the US economy $5 billion daily.
The strike could hit 36 ports that handle about one-half of US ocean imports. That could affect availability of a range of goods from bananas to clothing to cars shipped via container, while creating weeks-long backlogs at ports. It could also stoke shipping cost increases that may be passed on to voters already frustrated with housing and food inflation, according to logistics experts.
The International Longshoremen’s Association (ILA) union representing workers at ports from Maine to Texas and the United States Maritime Alliance employer group appear to have hit an impasse over pay. The current six-year contract expires at midnight on Sept. 30.
A strike at all East Coast and Gulf of Mexico ports would be the first for the ILA since 1977.
The White House said it is not trying to help broker a deal, as it did last year during West Coast talks, and a Biden administration official has said the president would not use his federal powers to block a strike.
A widespread and lengthy strike could cause shortages and cost increases across a broad range of industries.
About 14% of all US waterborne agricultural exports, by volume, would be at risk from a strike. Over a one-week period, the potential value of those exports is estimated at $318 million, according to the American Farm Bureau Federation.
Additionally, 53% of US waterborne agricultural imports by volume are vulnerable to a strike, leading to a potential economic impact of over $1.1 billion per week, the Farm Bureau said.
Three-quarters of the nation’s banana imports from countries like Guatemala and Ecuador land at ports on the East and Gulf Coasts, said Jason Miller, interim chair of Michigan State University’s department of supply chain management.
Separately, the US imports coffee and cocoa in large volumes and exports cotton.
A strike also would affect container exports of soybeans, soybean meal and other products and would have a significant impact on chilled or frozen meat and eggs, said Mike Steenhoek, executive director of the Soy Transportation Coalition.
The $18-billion-a-year US beef and pork export market and the $5.8 billion poultry and egg export sector relies on refrigerated containers that cannot sit idle for long.
About 45% of all waterborne US pork exports and 30% of beef exports were shipped via East Coast and Gulf Coast ports in the first seven months of this year, said US Meat Export Federation spokesperson Joe Schuele.
More than a quarter of all US egg and egg product exports and around 70% of all poultry meat exports are shipped from ports along the East and Gulf Coasts, according to Customs data and the USA Poultry & Egg Export Council.
The affected ports also handle more than 91% of containerised imports and 69% of containerised exports of US pharmaceutical products, according to Everstream Analytics.
More one-third of containers departing the US with lifesaving medications leaves from the port in Norfolk, Virginia, while nearly one-third of containerised pharmaceutical imports enter the country through the port in Charleston, South Carolina.
In broad terms, a strike would raise costs for shipping while also imposing lengthy delays.
The top five ports in the negotiating group – New York and New Jersey; Savannah, Georgia; Houston; Norfolk; and Charleston – 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 that cargo was inbound, while the remainder was outbound, he said.
Trade disruptions from a work stoppage would begin immediately, sending rates higher and rippling through the US economy, logistics experts warned.
Analysts at Sea-Intelligence, a Copenhagen-based shipping advisory firm, estimated that it could take anywhere from four to six days to clear the backlog from a one-day strike.
Maersk, one of the largest providers of ocean transportation and a member of the employer group, warned that a one-week shutdown could require up to six weeks of recovery time, “with significant backlogs and delays compounding with each passing day.”
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Publish date : 2024-09-26 14:22:00
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