As port strike continues, experts weigh in
The East and Gulf Coast port strike is now in its fourth day with no signs that the International Longshoremen’s Association and United States Maritime Alliance are heading back to restart contract negotiations. (Ed. Note: As of late Thursday, the strike ended as workers agreed to a tentative deal on wages and a contract extension.)
In an attempt to unload as many containers as possible for clients, ocean carriers moved containers off at alternative ports, but according to Vizion, which tracks container movements, approximately 2,000 shipments may have been dropped at a port that was not their intended destination, the report said.
Below is a sampling of what some experts have to say regarding the strike.
Michael Yamartino, CEO of Route
"The port strike will have huge impacts on supply chains, which may be particularly detrimental for brands that are already gearing up for the holiday season. For shoppers, this means longer wait times for gifts. For merchants, this is more than a logistical nightmare – it’s a customer experience issue that could impact overall brand loyalty, especially for small businesses with fewer resources."
"Today’s consumer expects immediate gratification and consistent clarity, especially when it comes to their holiday shopping. The best way merchants can prepare for the ripple effects of the port strike is to prioritize transparent communication with their customers and set clear expectations about what will happen to their purchases. Being prepared for disruptions will help merchants protect their holiday sales and customer relationships."
Mitchel Friedman, partner RCS Real Estate Advisors
"Retailers have responded swiftly to the recent port strike by turning to air freight and using West Coast and non-union ports in Texas. Some are also considering ports in Canada and Mexico to maintain business without disruptions."
"While these strategies provide temporary relief, a prolonged strike could be problematic, especially with the holiday season approaching — a period when any disruptions would have the most severe impact on retailers. If the strike continues, we could see shortages and rising inflation on goods."
Venable LLP
Given the potential risk of widespread supply chain snarls, especially for ocean shipments, stakeholders are advised to consider the following:
•Understand what protections and liabilities arise from your contracts in the event the labor unrest disrupts your business operations or ability to perform.
•Monitor the developments in the ocean shipping sector, such as the implementation of new, additional surcharges, the treatment of demurrage and detention fees, and other responses from common carriers and marine terminal operators.
Importantly, all applicable ocean shipping laws and regulations are in full force. Shippers should know what avenues for disputing charges are available, and regulated entities should ensure that they understand their regulatory obligations and are operating in strict compliance.
•Continue complying with all applicable laws and regulations administered and/or enforced by U.S. Customs and Border Protection (CBP) that are related to importing and exporting merchandise. Stakeholders must account for how the strikes may impede their ability to comply with certain requirements, including mandatory data transmissions. Advanced Qualified Unlading Approval (AQUA) Lane benefits for participants in the CBP Customs Trade Partnership Against Terrorism (CTPAT) will resume after the strike is concluded.
•Assess how these strikes may impact your current business operations and whether cargo diversion, delay of imports, or other alternatives are appropriate.
Sky Canaves, principle analyst, Emarketer
"The strike shouldn’t directly impact holiday shopping since goods in many popular seasonal categories, such as decorations, consumer electronics, toys, and clothing, are manufactured in Asian countries and have been coming in through the West Coast ports that remain open."
"However, a prolonged strike would create serious ripple effects throughout the economy just as inflation has finally gotten under control. It would drive up prices on a wide range of goods, from bananas to cars, that are more likely to be imported via the shuttered ports."
Loren Johnson, risk evangelist, Aravo
"Ports are critical chokepoints, and disruptions like this can bring global commerce to a halt. To mitigate the effects of a strike, companies that rely on ports to keep their business running need to adopt robust risk management and resiliency strategies. For example, they can consider rerouting shipments through alternative routes, such as the Panama Canal, or turn to air freight, despite higher costs, to ensure the delivery of essential goods."
"We’ve seen this approach work before, such as when medical supplies, including early COVID-19 vaccines, were flown into the U.S. to avoid delays. Flexibility and preparedness are key to navigating such challenges."
Melanie Hilton-Nuce, senior VP, community engagement, GS1 US
"The ongoing East Coast port strike serves as a powerful reminder of the critical role supply chain visibility and product identification play during times of disruption. With unprecedented delays threatening retail and consumer goods, knowing where products are at all times — and having the agility to pivot when necessary — has never been more essential."
"The pandemic already taught businesses hard lessons about supply chain disruption, and the current situation on the East Coast underscores the need to move beyond outdated, closed-loop systems. This strike is a wakeup call: Real-time collaboration and interoperable data sharing across the supply chain are non-negotiable for effective contingency planning and maintaining customer trust."