The US could face shortages and higher retail prices if the longshoremen's strike drags on

NEW YORK (AP) — U.S. ports from Maine to Texas closed this week as the union represented about 45,000 longshoremen went on strike For the first time since 1977.

Workers began picketing early Tuesday near ports along the East and Gulf Coasts.

A shutdown lasting more than a few weeks would have had the potential to raise prices and cause shortages across the country as the holiday shopping season — along with a close presidential election — approaches.

But the union that represents striking U.S. longshoremen, the International Longshoremen's Association, reached an agreement on Thursday to suspend the strike until January 15 to allow time to negotiate a new contract. Union members will return to work immediately until at least January.

What are the issues of the dock workers' strike?

The union is demanding significantly higher wages and a total ban Automation of cranes, gates and container transport vehicles which are used to load or unload cargo at 36 US ports. About half of the country's cargo is handled by ship in these ports.

The contract between the ILA and the United States Maritime Alliance, which represents the ports, expired on Tuesday.

The union's demand for opening was a 77% salary increase over the six-year contract periodwith Daggett saying this would offset inflation and years of small increases. ILA members earn a base salary of about $81,000 per year, but some can earn over $200,000 per year with large overtime hours.

On Monday, before workers took to the picket lines, the alliance said it had increased its offer to 50% over six years and promised to maintain automation limits from the old contract. Allianz also said its offer tripled employer retirement contributions and strengthened health care options.

Which ports were affected?

While every port can handle any type of goods, some ports specialize in handling goods for a specific industry. Ports affected by the closure included Baltimore and Brunswick, Georgia, the two busiest motor ports; Philadelphia, where fruits and vegetables are a priority; and New Orleans, where coffee, primarily from South America and Southeast Asia, various chemicals from Mexico and Northern Europe, and wood products from Asia and South America are processed.

Other major ports affected include Boston; New York/New Jersey; Norfolk, Va.; Wilmington, North Carolina; Charleston, South Carolina; Savannah, Georgia; Tampa, Fla.; Mobile, Alabama; and Houston.

Can the government intervene?

If a strike was seen as a threat to the economic health of the U.S., President Joe Biden might have done so Taft-Hartley Act of 1947applied for a court order for one 80-day cooling-off period. That would have suspended the strike.

But during an exchange with reporters on Sunday, Biden said “no” when asked if he planned to intervene.

“Because this is collective bargaining, I don’t believe in Taft-Hartley,” Biden said.

How do states react?

Florida Gov. Ron DeSantis said he would send the Florida National Guard and Florida State Guard to the state's ports to “maintain order” and potentially help restart operations as residents and businesses recovering from Hurricane Helene.

“This has the potential to really disrupt the hurricane recovery and hurt the people who were victims of the storm,” DeSantis said at a news conference Thursday. He spoke before it was announced that the union had agreed to suspend the strike.

Maryland Governor Wes Moore, Massachusetts Governor Maura Healey, New Jersey Governor Phil Murphy and New York Governor Kathy Hochul issued a joint statement saying they were monitoring the situation would monitor for incidents of price gouging.

What impact will this have on consumers?

With the strike suspended, consumers would likely not notice any significant shortages or price increases. If the disruption had lasted longer than a month, the story would have been different depending on what you buy. Most Christmas retail goods have already arrived from overseas, so there is a buffer. Prices of everything from fruits and vegetables to cars might have increased, at least temporarily, if it had dragged on.

That would have been unwelcome news after snarled supply chains drove up prices at the end of the pandemic, and could have potentially been politically damaging with Election Day about a month away.

The sell-by clock never stops ticking

Container loads of highly perishable bananas were stuck in some ports.

Before the suspension was announced, Agriculture Secretary Tom Vilsack noted that limiting the length of the strike was key to preventing shortages and higher prices.

The companies had drawn up emergency plans

Since then Major supply chain disruption in 2021“Retailers have adjusted to supply chain disruptions being the new norm,” said Rick Haase, owner of a mini-chain of Patina gift stores in and around Minnesota’s Twin Cities.

“The best approach for Patina was to secure orders early and have the goods in our warehouse and back rooms to ensure we had essential goods in stock,” Haase said.

Still, storing these goods for longer periods of time can have an inflationary impact on the bottom line as retailers must recoup or absorb these storage costs.

Jay Foreman, CEO of Basic Fun, a Boca Raton, Fla., maker of Care Bears and Lincoln Logs, has already transitioned all toy companies Container transport away from the East Coast to ports on the West Coast, primarily Los Angeles and Long Beach. This also comes with costs.

The maneuver has resulted in between 10 and 20% additional costs that his company will have to bear because Basic Fun's prices are tied to retailers for the next ten months. But Foreman would consider raising prices in the second half of 2025 if the strike lasts longer.

Daniel Vasquez, owner of Miami-based import and export specialist Dynamic Auto Movers, increased inventory in anticipation of a strike, particularly for vehicles that take longer to deliver.

It also no longer relies on a single port or shipping partner and has expanded its relationships with smaller ports and shipping companies that can avoid congestion areas.

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AP writers Brendan Farrington in Tallahassee, Florida; Stephen Groves in Dover, Delaware; Anthony Izaguirre in Albany, New York; Tom Krisher in Detroit; and Colleen Long in Washington contributed to this report.