On October 1, approximately 45,000 union workers may walk off their jobs at seaports along the U.S. East and Gulf Coasts, potentially halting crucial trade just weeks before the presidential election.

An analysis by JPMorgan forecasts that this strike could lead to daily losses of $5 billion for the U.S. economy.

This work stoppage could impact 36 ports responsible for about half of all U.S. ocean imports. Consequently, consumers might face shortages of various products, from bananas and clothing to cars transported by containers, along with significant delays at ports. Shipping costs could also rise, further burdening voters already grappling with high housing and food prices, according to logistics professionals.

What’s causing the potential port strike?

Negotiations have reached a stalemate between the International Longshoremen’s Association (ILA), which represents port workers from Maine to Texas, and the United States Maritime Alliance, the employer group. The existing six-year contract is set to expire at midnight on September 30.

If all ports on the East Coast and in the Gulf of Mexico strike, it would mark the first such action by the ILA since 1977.

The Biden administration has stated that it will not intervene to facilitate an agreement, in contrast to its previous involvement during discussions regarding West Coast ports, and officials have indicated that the president wouldn’t use federal authority to prevent a strike.

A prolonged, widespread strike could lead to shortages and price hikes across many industry sectors.

What are the roles of port workers?

Longshoremen, often known as stevedores, are responsible for handling cargo from arriving ships. Their primary work involves container ships, but they also assist with car carriers and cruise liners.

These workers operate cranes to lift containers from ships, ensure cargo is secured (lashing) to prevent it from falling during transit, and process related paperwork.

Ports facilitated $38 billion in vehicle imports last year

According to S&P Global Market Intelligence, ports included in the labor contract managed vehicle imports worth $37.8 billion for the year ending June 30, 2024, with the Port of Baltimore, Maryland, leading in car shipments.

Furthermore, auto parts are a significant import along the East Coast and Gulf Coast, and rerouting shipments from Europe poses greater challenges than rerouting from China, according to logistics experts.

These ports also lead in the U.S. for imports of machinery, fabricated steel, and precision instruments, totaling $97.4 billion, $16.2 billion, and $15.7 billion respectively, based on data from S&P Global Market Intelligence.

U.S. agricultural imports and exports could be impacted

Around 14% of all U.S. waterborne agricultural exports, by volume, may be endangered by a strike. Over a week, these exports could be valued at approximately $318 million, as per the American Farm Bureau Federation.

Additionally, 53% of U.S. waterborne agricultural imports by volume are also at risk, potentially leading to an economic impact exceeding $1.1 billion weekly, according to the Farm Bureau.

About 75% of the nation’s banana imports from countries like Guatemala and Ecuador arrive at East and Gulf Coast ports, according to Jason Miller, interim chair of the supply chain management department at Michigan State University.

The U.S. also imports large volumes of coffee and cocoa and exports commodities such as cotton.

A strike would hurt container exports of soybeans and soybean meal, and severely affect the transport of chilled or frozen meat and eggs, warned Mike Steenhoek, executive director of the Soy Transportation Coalition.

The $18 billion U.S. beef and pork export industry, alongside the $5.8 billion poultry and egg export market, heavily relies on refrigerated containers that cannot afford to be left idle for long.

During the first seven months of this year, around 45% of all U.S. pork exports and 30% of beef exports left through East Coast and Gulf Coast ports, reported Joe Schuele, spokesperson for the U.S. Meat Export Federation.

More than 25% of all U.S. egg and egg product exports, along with roughly 70% of all poultry meat exports, depart from ports on the East and Gulf Coasts, based on Customs data and the USA Poultry & Egg Export Council.

The impacted ports also handle over 91% of containerized imports and 69% of all containerized exports for U.S. pharmaceutical products, according to Everstream Analytics.

Notably, over a third of containers with essential medications leaving the U.S. depart from the port in Norfolk, Virginia, while nearly a third of containerized pharmaceutical imports enter the U.S. through the port in Charleston, South Carolina.

Retailers are expediting holiday shipments

Retail businesses account for about half of all container traffic. Many have already expedited shipments of goods for the year-end holiday season.

The ports potentially impacted by the strike are responsible for bringing in over half of the nation’s knitted and non-knitted apparel, which is valued at $32.8 billion collectively, alongside furniture valued at $23.4 billion, according to S&P Global Market Intelligence.

Despite Houston and New Orleans being major hubs for oil and gas shipments, experts believe that a strike focused on labor-intensive container cargo would not significantly impact those commodities. The same applies to coal exports from Norfolk, Virginia.

However, the ILA has committed to managing military cargo and servicing passenger cruise ships even during a strike.

A Week Off Work Might Lead to a Six-Week Delay, Maersk Warns

In general, a strike could increase shipping costs and result in significant delays.

According to John McCown, a senior fellow at the Center for Maritime Strategy, the leading five ports involved in negotiations—New York and New Jersey; Savannah, Georgia; Houston; Norfolk; and Charleston—processed over 1.5 million 20-foot equivalent units (TEUs) worth $83.7 billion in August. He noted that nearly two-thirds of this cargo was arriving cargo, with the rest being shipped out.

Experts in logistics have indicated that any interruptions to trade caused by a work stoppage would start right away, creating supply chain challenges.

Sea-Intelligence, a shipping advisory firm based in Copenhagen, predicted that a backlog from even a single day of striking could take about four to six days to resolve.

Maersk, a dominant player in ocean freight and part of the employer group, cautioned that a one-week shutdown might lead to a recovery period lasting up to six weeks, resulting in “significant backlogs and delays that would worsen daily.”