The looming port strike threatens price increases just in time for election day

What is likely to be the first nationwide maritime workers' strike in nearly 50 years could not have come at a more critical time.

With the economy still a top concern for American voters, experts warn that a longshoremen's strike could have a significant impact on the already tight presidential race, especially given the risk of disrupting supply chains and hurting consumer prices.

The strike, scheduled to begin Oct. 1, involves tens of thousands of longshoremen at ports on the East and Gulf Coasts stretching from Maine to Texas. These ports handle more than half of U.S. container imports, moving everything from auto parts and electronics to food and furniture.

At the heart of the dispute between the International Longshoremen's Association (ILA) and the US Maritime Alliance (USMX) are two central issues: stronger protections against automation and wages.

Even if the dock workers' strike only lasts a few days or up to a week, experts surveyed Newsweek say it could have serious consequences for Vice President Kamala Harris in her race against former President Donald Trump. This also puts the spotlight on President Joe Biden's pro-worker stance during a critical election period.

East and Gulf Coast ports handle a significant portion of U.S. container imports, including essential goods such as auto parts, furniture, electronics and food. If the strike is resolved quickly, experts say its economic impact could be contained. However, a prolonged strike could cause significant disruption, causing shortages in key sectors and driving up prices.

“If this is resolved in a few days, the impact will be minimal,” said Peter S. Goodman, supply chain expert and author of How the world ended everything. “But if it drags on for weeks, then you may have a very serious problem.” He explained that beyond manufactured goods, the strike could lead to delays in essential manufacturing components, such as auto parts, chemicals and building materials.

The price of bulky goods such as furniture is particularly sensitive to transport disruptions. “Large, bulky items like furniture are more impacted because fewer items fit in a container, driving up the cost per item,” said Ryan Petersen, CEO of Flexport. However, it may take longer for the full effect to be felt, he says.

In contrast, fresh produce such as bananas from Central and South America face a more immediate risk of spoilage due to delays in transportation.

“Fresh fruits and vegetables, particularly those imported through these ports, will be quickly affected,” noted Margaret Kidd, program director for supply chain and logistics at the University of Houston, adding that 75 percent of the country's imported bananas are over the East and the Gulf arrive at coastal ports.

Americans could also face higher prices as retailers suffer from a supply shortage.

“If the strikes continue, they will cause huge delays throughout the supply chain, creating a domino effect that could last into 2025 and cause chaos in the industry,” said Jay Dhokia, founder of supply chain management company Pro3PL .

The potential attack highlights vulnerabilities in the U.S. supply chain, which has already been tested by the COVID-19 pandemic, natural disasters and geopolitical conflicts. Retailers have tried to prepare by stocking up on inventory ahead of the holiday shopping season.

“Many retailers have already taken steps to mitigate the potential impact of a strike by bringing in products earlier or shifting shipments to the West Coast,” said Jonathan Gold, vice president of supply chain and customs policy at the National Retail Federation (NRF). *Newsweek*. “But even a minor disruption would have a negative impact and cause delays at a critical moment for both retailers and consumers.”

“One lesson we learned from COVID is the importance of better supply chain visibility and planning,” noted Flexport’s Petersen. “Companies need better tools to track shipments and plan for disruptions.”

Biden's dilemma

The upcoming strike by ILA workers will be the union's first since 1977. Its timing, just weeks before the election, presents President Biden with a political dilemma.

The government has the authority to intervene under the Taft-Hartley Act, which could provide an 80-day cooling-off period to delay the strike. However, such a move carries political risks, especially for Vice President Harris. Biden has positioned himself as the most pro-union president in decades, and intervention could anger unions, a key part of his political base.

“Biden has positioned himself as pro-worker, and using powers like the Taft-Hartley Act to end the strike could anger organized labor,” Goodman said. However, a prolonged strike that disrupts supply chains and fuels inflation could put Biden and Harris at odds with the broader public.

The strike also comes at a time when inflation is easing but remains a major concern for voters. Continued disruptions at ports could drive up prices for essential goods and heighten economic concerns as voters head to the polls.

“Trump could benefit by claiming he would run things better, while Harris could face backlash as the incumbent's nominee over inflation and supply chain issues,” Kidd said. “If the strike drags on, we will definitely see short-term inflation and consumers will feel that.”

Correction 9/30/24 6:37 p.m. ET: This article has been updated to correct Margaret Kidd's title.