What the Short East Coast Port Strike Means for Your Holiday Shopping

On October 1, thousands of longshoremen from the International Longshoremen’s Association, the union that controls longshoremen at East Coast and Gulf Coast ports in the United States, went on strike. Forecasts warned about this could cost the US economy billions dollars a day and causing supply chain disruptions as retailers stock up on items for the holiday season. However, within three days the strike was suspended and goods, from fruit to furniture, were again moving in and out of the ports, amounting to more than half of all container imports in the USA

While the strike’s short duration may have prompted a sigh of relief among supply chain managers, it still had a ripple effect on U.S. trade. Truck Parking Club studied data from Bureau of Transportation Statistics to identify the impact of the dockers’ strike on the supply chain.

“The U.S. port strike is over, but the impact is far from over,” said Mia Ginther, director of North American ocean shipping at logistics company CH Robinson. told “Dive into the supply chain”. “A week of delays typically results in delays at ports of at least a month, and these delays increase as you move inland.”

Fortunately, retailers stockpiling inventory and quickly addressing the shutdown may have helped avoid the worst of the fallout for holiday shoppers. However, read on to understand how this disruption is affecting consumers.

Delays were largely avoided

In 2022, port congestion and supply chain backups reached high levels. In ports on all coasts, ships were waiting longer to berth, and more ships were anchored near ports. However, logistics professionals may have learned a lesson from the long backups following the COVID-19 pandemic.

McKinsey surveys Supply chain leaders have found that many are building up inventories and relying on multiple sources of raw materials to maximize resilience post-pandemic.

Similarly, in the run-up to the October 2024 strike, more companies increased their shares before the shutdown was officially announced. This import front-loading was a response to both the looming ILA contract deadline and a way to mitigate any impact of the latest round of tariff hikes on imports from China.

Major toy makers Hasbro and Mattel, which funneled most of their goods through West Coast ports, peaked production and shipments in August and September, meaning the strike will likely have little impact on the hot 2024 holiday toys.

As the risk of a strike has grown, some companies have also become more reliant on West Coast ports. Costco and Levi Strauss & Co. were among the brands that shifted imports to West Coast ports from the East Coast.

Amid preloading and rerouting, the ports of Los Angeles and Long Beach, California, experienced their busiest month on record in July and August, respectively, handling more than 900,000 20-foot containers each. Officials say the Port of Los Angeles has the capacity to handle 1.2 million containers a month, and data shows it has not yet seen a sharp increase in the number of container ships waiting to berth.

On the West Coast, officials don’t predict any delays that could impact holiday shopping. Redirected imports are likely to arrive as the peak shipping season ends, meaning ports will be better prepared to handle any additional goods.

However, efficient ports are only one part of the supply chain.

Matt Smith, principal analyst at trade data and analytics company Kpler, told Stacker: “It’s not just about the delivery of the container ship, but all the other logistics that are a series of dominoes that need to happen once the cargo is delivered. discharged.”

Front-loading and rerouting ships increased the costs of warehousing and transporting goods that would otherwise be shipped later to the East Coast.

Following the strike, the freight-to-truck ratio (a measure of the number of deliveries relative to truckloads) increased nationally but fell the following week. Spot rates, which shippers pay to move goods, rose slightly in October, but are still below rates seen at the start of the peak season.

This increase may be due in part to the impact, but is also likely due to the simultaneous arrival of two major hurricanes in the Southeast.

Luckily for consumers, disruption is expected to be minimal. The National Retail Federation expects the strike to have no impact on the holiday shopping season.

What goods pass through each coast?

East Coast and Gulf Coast ports already account for more than half (56%) of containerized imports, but for some commodities their dominance is even more pronounced. For minerals, drinks, timber, fruits and nuts, these two regions account for more than 75% of imports, meaning prolonged disruptions could have serious consequences for these goods.

Although a lengthy strike was avoided, the ILA and the United States Maritime Alliance technically did not agree on a new contract. Their October agreement set new salaries and extended the current contract until Jan. 15, 2025. Supply chain managers will likely be watching the negotiations closely to prepare for potential future shutdowns.

Even if a new contract is signed by January, supply chain backup risks are never far away. Whether it’s the Red Sea crisis, the Panama Canal drought, or devastating hurricanes, a number of geopolitical and natural forces can impact trade and port congestion.

“There are many different things that can cause supply chain disruptions. Some of them are obvious, and some of them are simply impossible to prepare for,” Smith said.

Editing of the story by Karren Zhao. Additional editing by Kelly Glass. Copy edit by Paris Close. A selection of photographs by Claresa Möller.

This story originally appeared on Truck Parking Club and was produced and distributed in partnership with Stacker Studio.