Grocery retailers, shoppers react to port strike

A port strike which has shut down ports along the East Coast and the Gulf of Mexico is now well into day three and grocery retailers are feeling the pressure.

There are some reports of shoppers panic-buying grocery essentials like toilet paper as they did during the early days of the COVID-19 pandemic, and retailers are turning to alternative plans for various products.

The International Longshoremen’s Association (ILA) and the United States Maritime Alliance (USMX) remain at a stalemate in contract negotiations. The ILA’s 85,000 members want a 77% wage increase and the union is accusing shippers of “gouging” customers resulting in increased costs to American consumers. Shippers are now charging $30,000 for a full container, an increase from $6,000 a container just a few weeks ago, according to the ILA. 

https://www.supermarketnews.com/grocery-operations/costco-walmart-keep-an-eye-on-possible-port-strike

President Joe Biden released a statement about the port strike on Monday and said he has urged USMX to come to the table and present a fair offer to the workers of the ILA that ensures they are paid appropriately in line with their “invaluable contributions.” 

Biden said he would not enact the Taft Hartley Act, which restricts the activities, including strikes, and power of labor unions.

There have been some reports of consumer panic buying across the country. A Sam’s Club in Myrtle Beach was already out of water, toilet paper, and paper towels by 10:30 a.m. on Tuesday, reports The Sun News. In Shreveport, La., several stores said shoppers were filling up their baskets with essentials, according to KEEL 101.7 FM. 

The port strike combined with Hurricane Helene recovery efforts have put an extra strain on grocers in the southeast to keep shelves stocked. 

Grocery retailers, however, appear to have everything under control. During Costco’s earnings call last week, CEO Ron Vachris said the Issaquah, Wash.-based warehouse retailer had contingency plans in place if a strike did happen, and in an emailed statement to Supermarket News Bentonville, Ark.-based box retailer Walmart said it prepares for unforeseen disruptions in the supply chain and maintains additional sources of supply to ensure key products are available to customers. 

San Antonio, Texas-based grocer H-E-B released the following statement on X on Tuesday: 

“At H-E-B, we regularly prepare for potential supply chain situations. We do not anticipate any customer impact from the port strike at this time. Our team has been working with suppliers for weeks to serve Texans. Most products are not impacted by this strike. Our stores are receiving shipments and are in a strong position that allows our partners to continue to restock shelves throughout the day.” 

Still, one grocer is taking precautions. Cincinnati-based grocery retailer Kroger has temporarily set purchase limits per customer on certain products like paper towels, toilet paper, and water. 

Bananas, imported chocolates and meats, and beer, liquor, and wine are items which could be impacted the most during the port strike, according to KHOU 11 in Houston. 

Most of the bananas are imported to the U.S. In fact, 25% of the fruit move through Port Wilmington in Delaware, which is currently shut down due to the strike, according to the American Farm Bureau. 

Margaret Kidd, a program director and instructional associate professor in Supply Chain & Logistics Technology at the University of Houston, told Supermarket News she does not believe the strike will last very long, especially with the presidential election about a month away. 

However, if the work dispute goes into a third week it could start wreaking havoc.

“[President Biden] is at risk of alienating the labor vote for a potential Harris administration, and he’s got to balance that with a potential hit on the economy,” Kidd said. “You get into a couple weeks [with the strike] and you are doing damage to other Americans, so it’s a larger cohort. It’s the whole economy.”

Kidd said the current offer by USMX to the ILA longshoremen calls for a 50% increase in pay wages. The ILA is asking for a 77% increase. 

“The longshoremen put America’s families ahead of their own families during COVID,” she said. “They weren’t even given access to vaccinations as frontline workers. So I think it’s reasonable that they are asking for a pay increase.

“I think if they get up close to a 60% [pay increase] maybe they can get something worked out.”

If the strike does move into next month prices on some grocery items, like shrimp, could begin to rise. 

Stew Leonard Jr., president of Stew Leonard’s based in Norwalk, Conn., told Fox News that the price to transport shrimp from the Gulf of Mexico was 10 cents a pound earlier in the week, but it now stands at 22 cents a pound and could get as high as 40 cents a pound. That price increase would be passed on to the consumer, he added.