Longshoremen’s strike nears, portending wide impact on goods

Longshoremen at ports along the East Coast and Gulf of Mexico could go on strike at midnight Monday. These workers load and unload shipping cargo, and without them, it’s a lot harder to get goods where they need to go in this economy.

The cost of a strike could be up to $5 billion per day, according to an estimate by JPMorgan Chase, and it could affect the flow of everything from cars to cardboard.

Imagine a giant cargo ship full of car parts, like alternators, radiators and batteries. If that ship can’t make it to shore and unload, carmakers could have trouble making cars.

“So this means you’ve either got to slow down your manufacturing process or possibly at some point close it down,” said Margaret Kidd, a professor of supply chain and logistics at the University of Houston.

She said other kinds of products could be held up too, including the edible kind. “From a consumer standpoint, I’d be concerned about fresh fruits and vegetables,” Kidd said.

Take bananas. A lot of them are imported into Wilmington, Delaware.

The longer bananas sit on a ship, the browner they get. Tinglong Dai, who studies operations management as a professor at Johns Hopkins, said any delay could affect “how much of the food could still be fresh, crisp, usable by the time they have arrived.”

Dai said that could lead to empty shelves in grocery stores. And if the slowdown goes on for too long, it could also affect the production of packaging because paper and wood pulp are big imports, said University of Maryland logistics professor Geoff Milsom.

“The pulp and paper products go into — the obvious thing would be paper and notebooks and printed paper — but also just all of the corrugated and all of the packaging that goes into all of the consumer products that we end up buying,” Milsom said.

Speaking of those consumer products, Milsom said many retailers have already built up their inventories for the holidays.

But they will want to be nimble. Say there’s a run on Squishmallows, the animal or character pillows that are hot with kids right now, and a store needs to order a bunch more turquoise ones with cute, little owl faces. They could take a while to arrive.

As Milsom pointed out, the effects of a strike can be cumulative at a port. It can create a bottleneck where some ships are stuck waiting to be unloaded, and others full of car parts and Squishmallows and bananas are at anchor waiting to come in.

“A one-day port strike can take about a week to recover from,” he said.