Workers at ports located in the eastern and southern parts of the US have gone on strike due to disagreements with employers over wage increases and automation. Under the first strike organized by the union since 1977, port workers in the city of Baltimore, located in the state of Maryland, have also joined by walking off the job. The strike initiated by port workers in 36 ports across the US, from Maine to Texas, carries the risk of paralyzing the country’s supply chain and economy. Approximately 45,000 port workers affiliated with the International Longshoremen’s Association (ILA) are demanding a 77% wage increase. It is estimated that the strike will cause billions of dollars in losses to the US economy every day and lead to an increase in consumer prices. THE MOST AFFECTED PRODUCT: BANANAS Experts point out that the effects of the strike will be first felt in perishable food items. The strike that began on Monday night may initially affect products such as bananas, avocados, pineapples, and fruit juices. In particular, bananas are indicated as the most affected product by the strike. According to the American Farm Bureau Federation, the affected ports account for 75% of the US’s annual banana needs, which translates to 3.8 million metric tons of bananas per year. Jason Miller, a Supply Chain Management Professor at Michigan State University, stated that not only bananas but also other perishable fruits such as dates, figs, pineapples, and avocados are at high risk. Miller mentioned that these perishable foods will lead to disruptions in the supply chain and increase consumer prices in a short time. Additionally, products like alcoholic beverages may also struggle to make it to the shelves. POSSIBLE CHALLENGES DURING THE HOLIDAY SEASON If the strike continues for a few more weeks, many products may experience supply shortages during the winter holiday season, which is the busiest shopping period in the US. Delays in the delivery of a wide variety of goods like toys, artificial Christmas trees, car parts, coffee, fruits, and electronics can be expected. Particularly, European toy manufacturers like Playmobil and Lego will suffer a major blow as they are dependent on the East Coast ports in the US. On the other hand, competitors using West Coast ports, such as Jakks and Funko, may be less affected. Supply chain disruptions will not only affect retailers but also put automobile parts suppliers in a difficult situation. Retailers and importers are trying to secure their product stocks before the holiday season, their most crucial sales period, resorting to West Coast ports and air transportation, which are both costly and limited solutions. $4.5 BILLION LOSS PER DAY According to JP Morgan’s analysis, the closure of ports on the East and Gulf coasts could cost the US economy between $3.8 billion and $4.5 billion per day. While some of these losses resulting from the strike can be compensated for once things return to normal, there could be a significant blow to the US economy in the short term. It was expected that US President Joe Biden would demand an 80-day waiting period using the Taft-Hartley Act to stop the strike, but over the weekend, Biden clearly stated that he would not intervene in the strike. The White House announced that administration officials are working to expedite negotiations for 24 hours and that Biden and Vice President Kamala Harris are closely monitoring the effects on the supply chain. Additionally, a task force has been established to prepare for potential disruptions. WAGE AND AUTOMATION DEMANDS ADD TENSION One of the main reasons for the strike is the workers’ demands for wage increases. ILA is demanding a 77% increase in wages for its members over a period of six years. If this increase were to occur, a typical union member’s salary would rise from $81,120 to $143,520. However, the Union is not only limiting their demands to wage increases but also insisting on a complete ban on automation of cranes, gates, and container-hauling trucks at the ports. Negotiations between the International Longshoremen’s Association, representing the ports, and the United States Maritime Alliance, have been suspended since June. There are no plans for any new meetings between the sides, indicating that the strike could last long. The strike by ILA will be the biggest strike organized by the union since 1977. WHICH PORTS WILL BE AFFECTED? Some of the ports that will be affected include major trade centers like Boston, New York, New Jersey, Norfolk, Wilmington, Charleston, Savannah, Tampa, Mobile, and Houston. These ports handle about half of the total container shipping in the US. Additionally, some ports specialize in handling goods from specific sectors, meaning that certain industries could be more significantly affected. The US’s largest retailers, Walmart and Costco, tried to strengthen their supply chains by increasing their product stocks in advance to avoid being affected by a potential strike. However, even these measures may prove limited. Retail experts state that the strike, especially coinciding with the busiest shopping season of the year, the winter holidays, will lead to both price increases and empty shelves. The effects of the strike and port closures may continue to impact US consumers for a long time. Should the strike prolong, supply chain disruptions could potentially lead to much broader economic issues throughout the United States.