How will the port strike affect holiday shopping?

A massive labor strike, involving 45,000 workers across three dozen East Coast and Gulf Coast shipping ports, went into effect at midnight Monday and could have global impacts, and reignite U.S. inflation, if the stoppage turns into a protracted event.
Members of the International Longshoremen’s Association have so far been unable to reach an agreement over wages and protections against industry automation in talks with ports’ representative U.S. Maritime Alliance. Union leaders say shipping companies raked in billions during pandemic conditions as rates skyrocketed amid global supply chain snarls while workers saw only moderate pay increases.
“Now we want them to pay back,” local ILA president Boise Butler told the Associated Press. “They’re going to pay back.”
The run-up to Tuesday’s labor action has stretched for months, a dynamic that allowed many U.S. businesses to plan for a potential stoppage by upping orders before port operations came to a halt.
The timing has raised questions about potential impacts to the upcoming winter holiday shopping season, a critical revenue cycle for a wide swath of U.S. businesses. But retailers typically have already received around 70% of their holiday inventory by this time and, thanks to the early signaling by ILA that a strike could be in the works, the number is even higher this year, according to a report from CNN.
However, even as the U.S. holiday shopping season is mostly insulated from strike-related impacts, the stoppage could have serious domestic and global repercussions should it extend into the coming weeks.
The port locations impacted by the strike, which stretch from Maine to Texas, handle a wide variety of goods, including bananas and other produce, European-made beer, wine and liquor, along with furniture, clothing, household goods and European autos. The ports also handle imported parts needed to keep U.S. factories running and workers in those plants on the job, among many other goods, per CNN.
“The top line takeaway here is duration amplifies impact,” Lisa DeNight, managing director of national industrial research at Newmark, told CNBC’s “The Exchange” on Monday.
“If this strike goes on for a couple of days the implications are, well, rather short-lived, I’d say. If this drags on, it has cascading impacts throughout the global economy — not just the U.S. economy. So, the unpredictability of this issue here is really in play and it has the magnitude to really throw a giant wrench in global supply chains,” she added.
National Retail Federation president and CEO Matthew Shay called on President Joe Biden to invoke administrative powers to intervene in the stoppage to protect U.S. businesses and their employees.
“NRF urges President Biden to use any and all available authority and tools — including use of the Taft-Hartley Act — to immediately restore operations at all impacted container ports, get the parties back to the negotiating table and ensure there are no further disruptions,” Shay said in a statement posted by the NRF on Tuesday. “A disruption of this scale during this pivotal moment in our nation’s economic recovery will have devastating consequences for American workers, their families and local communities. After more than two years of runaway inflationary pressures and in the midst of recovery from Hurricane Helene, this strike will result in further hardship for American families.”
Speaking to reporters on Sunday, Biden said he had no plans to intervene in the ILA strike.
“It’s collective bargaining,” Biden said, per CNBC. “I don’t believe in Taft-Hartley.”
Under powers granted by the Taft-Hartley Act, also known as the Labor Management Relations Act of 1947, presidents can intervene in labor disputes that threaten national security or safety by imposing an 80-day cooling-off period.