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The dockworkers strike is historic — when will it affect Texas store shelves?

Observers say availability of products could be at stake, but not right away; ‘the longer this goes on, the more disruption there’s going to be.’

Will the strike idling ports from Texas to Maine hit home in the Dallas region?

The work stoppage — which began hours ago when thousands of dockworkers walked off the job — could impact local store shelves in the Dallas area but not right away, experts say. That could mean how many products are available and potentially even pricing, observers say.

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”The longer this goes on, the more disruption there’s going to be,” said Jesse Thompson, senior business economist at the Federal Reserve Bank of Dallas’ Houston branch.

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At midnight Monday, the contract between the ports and about 45,000 members of the International Longshoremen’s Association expired — even though progress was reported in talks earlier that day.

At Port Houston, at least 50 workers started picketing carrying signs saying, “No Work Without a Fair Contract.” The strike affecting 36 ports is the first by the union since 1977.

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Shoppers may root for a resolution that’s sooner — a matter of days — than later. Potential product shortages that could come earlier might range from bananas to clothing to autos.

Consumers can start worrying if the strike lasts more than a week,” Metin Cakanyildirim, a professor of operations management at the University of Texas at Dallas, said in an emailed response to questions. “A long strike can cause material/product unavailability, and supply chains cannot easily find alternative modes of transportation to replace maritime shipping.”

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The shortages could hit “critical, unique and moderately expensive” items, Cakanyildirim said. However, cheap and common products can escape those challenges, as they can be sourced elsewhere.

Industries have been preparing for a potential hit. Many retailers brought cargo in early and shifted to alternate ports as a precaution, according to Jonathan Gold, vice president for supply chain and customs policy at the National Retail Federation, in a statement last month.

“We know that retailers, that firms across the landscape here have front-loaded a lot of their container movements this year,” Thompson said. “There are inventories; there are fall product(s); there’s Christmas, seasonal stuff that has been moved in ahead of the strike so as to minimize some of the damage. But we don’t know how robust that inventory is against the stoppages.”

Perishable items are more likely to be affected by prolonged stoppages that keep container ships from offloading items efficiently, Thompson noted.

D-FW has the advantage of being less dependent on the East and Gulf Coasts than many large cities in the eastern United States, according to Jean-Paul Rodrigue, a professor in the Department of Maritime Business Administration at Texas A&M University-Galveston. Locally, 44% of the maritime containers coming in or out of the metro are associated with the Port of Los Angeles and Long Beach on the West Coast. Still, the region takes a hit with these stoppages.

”It will be very difficult to adjust since there will be a lot of traders, particularly retailers, that will be competing for the available capacity,” Rodrigue said, who also noted that about 56% of the container volume handled by the continental U.S. is affected by the strikes.

With a strike that lasts more than a week, shortages would become apparent in almost every sector, Rodrigue said.

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As for what happens with prices, there could be pressure, but it’s difficult to find clarity.

“It’s really hard to say,” Thompson said. “But there is going to be some pass-through.”

Cakanyildirim said price changes are subject to many macroeconomic factors that have bigger effects than issues at the docks. The professor doesn’t expect price spikes from the strike.

Rodrigue said the threat is there for the economy.

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”Even if transportation accounts for around 5 to 10% of the retail price of a good, if a good (becomes) scarce because it is stuck somewhere on a ship or a warehouse, prices are certain to go up while scarcity lasts,” Rodrigue said. “For instance, 98% of all the coffee imported in the U.S. is by container.”

If the strikes last more than two weeks, the situation becomes almost untenable, Rodrigue said, and that would require the federal government to intervene.

There will be broad costs of some kind, experts say. For example, a one-week strike could cost the U.S. economy $3.78 billion, according to a report by The Conference Board.

Whatever the case, companies are in better shape today than they were during the difficult days of COVID-19′s surge, Thompson said.

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”Businesses have made a lot of investments in supply chain resiliency since the pandemic,” Thompson said. “In many ways, there’s actually excess capacity compared to say where we would have been several years ago had this happened. Our ability to move things around, to kind of optimize our inventories is probably in relatively good shape.”

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