For the first time since 1977, around 50,000 members of the International Longshoremen’s Association union announced that they would go on strike. The economy is now set to take a blow from the labor stoppage, with several items at the store expected to see their price tag rise.
According to American Farm Bureau Federation economist Daniel Munch, who recently spoke with CBS MoneyWatchabout the strike, Americans will be likely to see price increases from the strike pretty rapidly. Bottom line, the longer the strike goes on, the longer he says the issue will exist.
“Each day that this goes on, it creates a backlog of containers and ships,” Munch said. “A 3-to-5-day strike will take two weeks to clear — if it goes into three-week territory, it will be early January before it gets cleared.”
The ports impacted by the strike handle around half of the country’s trade in cargo containers, with everything from holiday toys to cars coming through them. However, the area that could see the most drastic impact is what we buy at the grocery store.
For everything grown or caught outside the US, including coffee, fruits, vegetables, and seafood, the price is expected to rise as products remain on ships instead of entering the country. While grocers likely have some supply, Munch warns that things will expire or go bad, leaving shortages and higher prices for what’s left.
As for how much of those products come through our ports, the farm bureau reports that 75% of bananas, 90% of cherries, 85% of canned foodstuffs, 82% of hot peppers, and 80% of chocolate arrive via cargo containers, and are then offloaded at the ports.
Other major imports include beverages, with 80% of imported beer, scotch, whiskey, and wine coming through the affected ports, as well as 605 of rum, according to the farm bureau.
But beyond imports, the US economy could also take a hit from its exports being left to sit and potentially spoil instead of being loaded up and shipped to the rest of the world.
Munch wrote for the farm bureau that if the strike continues, “Approximately 14% of all US waterborne agricultural exports, by volume, would be at risk.”
Still, while imports are also at risk, ports on the East Coast only export around 46% of the US’s agricultural exports, compared to ports on the West Coast that export around 54%, according to the farm bureau.
For imports, the disparity is far larger, with the East Coast taking in 72% of the country’s agricultural imports, compared to the West Coast which takes in 28%.