Massive port strike is expected to severely disrupt supply chains

The 45,000 workers who unload cargo at major ports along the Atlantic and Gulf Coast shores have called a strike, putting a crimp into the supply chain for imports ranging from bananas to machine parts.

Economists have forecast that the shutdown of 36 ports will cost the nation about $5 billion a day in lost commerce. About half the nation's imports come through those points of entry. 

The U.S. has not contended with a disruption of imports at that scale since 1977. 

Authorities say end buyers like restaurants are unlikely to feel the squeeze for several days.  Some importers had boosted the volume of recent incoming shipments to provide a cushion if a strike should be called.

President Biden has acknowledged the severity of the situation, but stated that he would not exercise the powers afforded him by the Taft-Hartley Act to intervene in the negotiations. 

The walk-off was called by the International Longshoremen’s Association after their contract with a shipper’s group expired at midnight. The representatives of employees and employers have bitterly accused the other of refusing to negotiate a new employment pact in good faith. 

“An extended strike will likely cause dramatic increases in the cost of goods, intensifying this inflationary environment,” said Leslie Sarasin, president and CEO of FMI — The Food Industry Association. “And, unfortunately, this situation cannot be addressed by a switch to alternative ports due to the freight costs and time associated with transporting products back to the East Coast.”

The union is reportedly seeking a 77% wage hike over a six-year stretch, which would raise the top pay rate for veteran longshoremen to $69 an hour. The current high tier is $39.

The situation could be complicated for restaurants by a pledge from the International Brotherhood of Teamsters to stand “in full solidarity” with the longshoremen. The union’s members include the drivers of some foodservice distributors.

Teamsters President Shaun O’Brien said in a statement that his membership will at the very least refuse to cross any picket lines, but did not indicate if the union would take further action to show support for the dock workers. 

But he urged the White House to uphold its pledge and remain on the sidelines.

“The U.S. government should stay the f**k out of this fight and allow union workers to withhold their labor for the wages and benefits they have earned,” O’Brien said.

Restaurant operators say the supply chain for some products is only now resuming the smoother operations of pre-pandemic times. Those kinks in supply contributed to a sharp rise in food costs and a resulting spike in pricing for the last two years. 

This story was originally posted on Supermarket News' sister publication Restaurant Business.