Retailers Intensify Imports Ahead of Imminent Dockworker Strike
With dockworkers from Maine to Texas poised to strike on Tuesday, the potential repercussions of a work stoppage may be mitigated by retailers who have been ramping up imports in recent months, according to Ron Leibman, chair of the transportation, logistics, and supply chain management practice at Newark, New Jersey-based law firm McCarter & English.
“Retailers have been proactively stocking their inventories in anticipation of this situation. Whether this preparation will cover the entire season remains uncertain, but it certainly positions them better than if they hadn’t taken action,” Leibman noted in an interview.
The International Longshoremen’s Association (ILA), representing 25,000 dockworkers, has announced that its members plan to walk off the job when their employment contract with the United States Maritime Alliance (USMX) expires at midnight on Monday. Key issues under negotiation include wages, benefits, and regulations surrounding port automation, as contract discussions reached an impasse in June without any new meetings scheduled.
The ILA/USMX agreement encompasses services at 36 ports across the U.S., including major ports in New York, Houston, Miami, New Orleans, and Savannah, Georgia.
Leibman observed that retailers have had ample opportunity to prepare for the possibility of a strike. “Traffic volumes from Asia to the U.S. have increased significantly over the past few months,” he remarked. “Many of my clients are well-stocked, and savvy retailers have been importing their goods for the upcoming holiday season for quite some time.”
However, not every sector can afford to stock in advance. Industries like manufacturing and food and beverage could face serious repercussions from a strike, Leibman added. “While many have prepared, certain sectors will be affected. Industries such as food exports and manufacturing parts are especially vulnerable; delays in food exports could adversely impact farmers and food manufacturers,” he explained.
The East and Gulf Coast ports affected by the anticipated ILA strike handle over 40% of U.S. imports and exports. Thousands of containers holding essential goods—including fresh produce, coffee, plywood, plastic resins, auto parts, and manufactured components—could be disrupted.
Barry Kukkuk, co-founder and CTO of supply chain software provider Netstock, indicated that the retail, consumer products, and manufacturing sectors can expect significant fallout from a longshoremen’s strike. “If the ILA strike occurs on Tuesday, it could severely impact a diverse range of goods, leading to notable inventory delays across the U.S. This will likely affect companies that rely heavily on port access or cannot shift transport modes easily,” Kukkuk stated via email.
Kukkuk emphasized that while larger ports may experience the most significant disruptions, the impact will ripple throughout the supply chain. “Key ports, such as Savannah, Charleston, New Orleans, and Houston, are likely to suffer substantial slowdowns or even closures due to their vital roles in facilitating U.S. imports,” he warned.
Leibman raised concerns about the likelihood of a strike, highlighting that dockworkers feel emboldened by recent labor successes, including those won by the Teamsters at UPS and the United Auto Workers against major auto manufacturers. “The chance of a strike is very real; I believe [ILA President] Harold Daggett is intent on making a statement before his tenure ends,” Leibman stated. “It seems the union is determined to move forward with a strike.”
When the ILA halted contract discussions with USMX in June, a major contention point was port automation, with the ILA reportedly demanding a total ban on automating equipment used for container movements. Leibman reflected on the implications of automation for longshore jobs, stating, “In Virginia, where some automation has been implemented, the number of ILA members has actually increased over the past two years. Similarly, West Coast ports have seen a rise in union membership during the same period. The notion that automation equates to job losses needs reevaluation, as automation can create new job opportunities if it increases port efficiency.”
As the strike deadline approaches, East and Gulf Coast ports are enacting contingency plans to expedite cargo clearance. Some ports have extended gate hours and warned shippers that refrigerated cargo will not be monitored after next Monday.
Kukkuk urged businesses to prepare for future disruptions by adopting proactive planning and utilizing accurate logistics data. “In the short term, businesses can improve their readiness for potential strikes by allowing for extended lead times on shipments. By leveraging accurate data and supply chain technology, companies can enhance their agility and responsiveness, enabling them to make informed decisions to meet demand amidst future challenges.”
