Retailers have ramped up their merchandise deliveries amid a threatened strike by U.S. dockworkers that could disrupt the imminent holiday shopping season.
The longshoremen’s six-year master contract expires at 12:01 a.m. on October 1, and James Vanderloo of the logistics company OEC Group told FI that dockworkers want “extremely aggressive deals.”
Anticipated Consequences
Some 45,000 dockworkers are poised to walk out at 36 ports along the East and Gulf coasts.
Longshoremen last struck in 1977, and experts warn that spot shortages could start cropping up if a walkout lasts longer than a month.
“Generally, any threat of uncertainty is going to add to importers’ concerns and influence their purchasing behaviors,” Vanderloo said.
Importers shifted orders to West Coast and Canadian ports to try to get ahead of the possible labor strike, but that strategy has swamped those ports, and a six-day lockout at the Canadian National and Canadian Pacific Kansas City railroads has further complicated the situation.
The White House’s Response
The Wall Street Journal reported that the International Longshoremen’s Association (ILA) is seeking a 77% wage increase over the next six years. Negotiators for the ILA and USMX — the United States Maritime Alliance, which represents employer interests from Maine to Texas — have yet to meet.
The Biden administration has said that it will not intervene despite the potential havoc a strike of this magnitude could wreak on the U.S. economy. The administration, instead, has urged both sides to negotiate.
“We’ve never invoked Taft-Hartley to break a strike and are not considering doing so now,” a Biden administration official told Reuters.
“A sleeping giant is ready to roar… if a new master contract agreement is not in place,” ILA President Harold J. Daggett said in a statement. “My members have been preparing for over a year for the possibility of a strike.”
The Labor Union’s Demands
The ILA said that it is trying to make up for inflation, noting that, in the last three years, wages increased just 2.02% while inflation was up more than 12% for the period and up 20% from 2021.
Top-scale workers currently earn $39 an hour, or $81,000 annually, plus overtime and benefits that can boost pay upwards of $200,000, CBS News reported.
“Time is running out to get a new master contract agreement settled with USMX,” the ILA added.
Holiday Shopping Concerns
During the summer, West Coast ports handled 61% of the cargo from Asia, the most since the pandemic, with California’s LA and Long Beach ports accounting for the biggest share, the Journal reported.
“This is a critical time as retailers prepare for the all-important holiday season, and we need every port in the country working at full capacity,” said Jonathan Gold, National Retail Federation VP of Supply Chain.
Experts told FI that retailers are placing their orders three to six months earlier than usual, resulting in an earlier start for shipping as well.
“Port congestion, limited shipping availability, and increasing costs are major worries,” said Albert Brenner, co-owner of Altraco, a manufacturing outsourcing company.
With pandemic shortages still top of mind among consumers, recent data from PissedConsumer indicates that Amazon, with its promise of same-day and other delivery options, has become the go-to retailer.
Of the 1,032 consumers who answered the survey, 73.8% said they head straight to Amazon.
“Amazon has always prioritized efficient logistics and customer-centric policies,” said Michael Podolsky, PissedConsumer CEO and Co-Founder. “This year’s survey indicates that 21.7% of consumers consider purchasing food products during the holiday season. With inflation affecting prices in various sectors, many consumers may reallocate their holiday budget to essential items like food.”
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