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Potential port strikes send ripple effects through the supply chain, threatening inflation

The threat of port strikes on the East Coast and in the Gulf of Mexico is sending shockwaves through the supply chain, and raising concerns about inflation.

“Goods shipped across the country will not only arrive late but will cost more, eg, early winter and holiday clothing,” George Kochanowski, CEO of logistics company Staxxon, told FOX Business.

Kochanowski continued, “If the goods were boxed, where would all these things go and who would pay for them to be stored, counted, and repackaged? All these costs would be included in the price of the goods sold.”

The International Longshoremen’s Association (ILA) negotiates on behalf of 45,000 longshoremen in thirty American ports from Maine to Texas where together they handle nearly half of the nation’s seaborne imports. It has warned its members that they are prepared to stop working if they do not have a new contract by the October 1 deadline.

PORT STRIKES COULD HAVE ‘DESTRUCTIVE’ EFFECT ON ECONOMY, TRADE GROUP SAYS

The problem is that this comes at a critical time of the year for retailers, who told FOX Business that if a new labor agreement isn’t negotiated by the end of the month, it could have a “negative impact” on the overall US economy. .

The container ship docked at the Port of Miami on Dec. 27, 2012, in Florida. (Joe Raedle/Getty Images)

Jim Gillis, president of the Pacific region of IMC, a nationwide port trucking company, said he sees “a lot of problems related to the increase in cargo – especially port congestion and lack of lake chassis.”

It was something they hadn’t seen months ago.

CHRISTMAS IN SEPTEMBER: HERE’S WHAT HOLIDAY-THEMED GOODS ARE FOR SALESMEN.

Baltimore port dockworkers

Ship workers talk next to stacked containers at the Port of Baltimore in Maryland on Oct. 14, 2021. (Jim Watson/AFP via/Getty Images)

“As a trucker, we see significant wait times for our drivers and in some cases, even being turned away due to traffic – this is directly related to the increased volume transferred to the West Coast,” continued Gillis. He mentioned that there has been an 18% increase in cargo on the West Coast.

The ports of Los Angeles and Long Beach have seen an increase in cargo related to the possible strikes. However, Gillis noted that shippers made the decision to move cargo to the West Coast between six and 10 weeks ago at least, before the cargo arrived on the West Coast.

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“Those retailers who are now looking at freight forwarding are a bit behind the eight ball and are not finding quick, economical solutions to their problems,” he added.

Still, these attacks are not “nearly the levels we’ve seen during this pandemic and we haven’t seen anything approaching an ’emergency’ situation,” Gillis said.

Goya Foods Vice President Joe Perez said the company has been busy preparing for a possible strike in the past few months by increasing safety stock, shipping Christmas items ahead of schedule and adding more ocean freight.

the train

Norfolk Southern train on Feb. 14, 2023, East Palestine, Ohio. (Angelo Merendino/Getty Images)

In the past two weeks, Perez said they have been moving goods faster to airports, increasing reception hours and adding trucking services.

Meanwhile, Norfolk Southern Railway, which operates about 20,000 miles across 22 states, said it was keeping freight running.

“We are working with customers to improve our network, as well as our partnerships with ocean carriers, short-haul lines, and Class I western railroads, to minimize disruption and ensure that critical freight continues to move as smoothly as possible,” Norfolk Southern said. FOX business.


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