US Port Strike: The Most Affected Companies
The International Longshoremen’s Association (ILA) has seen nearly 50,000 of its members walk off the job, potentially causing severe delays for billions of dollars’ worth of goods.
The strike began on October 1st, 2024, with an estimated 147 vessels carrying goods valued at $34.3 billion arriving at 14 idle ports along the East and Gulf coasts of the U.S. This strike, occurring during peak shipping season, could impact up to 49% of all U.S. imports.
A graphic provided by Dorothy Neufeld of Visual Capitalist, based on data from ImportGenius and Arbor Data Science shared by Liz Ann Sonders, shows the companies most exposed to the strike. These are the companies with the highest number of twenty-foot equivalent units (TEUs) imported at East and Gulf coast ports over the past year.
Retail and Tech Firms Most at Risk
The companies most exposed to the dockworker strike, based on TEUs imported over the last year, are primarily retail giants and tech firms.
Walmart, the most exposed company overall, has prepared for the strike by stocking extra inventory in key product categories to offset potential supply chain disruptions. On average, Walmart, the world's largest retailer, imported around 4,000 TEUs per month through these ports over the past year. The average value of one container is approximately $50,000.
Other major retailers, such as IKEA and Home Depot, also face significant exposure. Tech firms Samsung and LG were among the top five importers last year.
The auto industry is another sector at high risk. Hyundai, General Motors, and major tire manufacturers import thousands of containers through these ports each year. A prolonged strike could increase production costs due to input shortages. However, recent recovery in automaker inventories provides some buffer against immediate supply chain disruptions.
The Unfolding of the U.S. Port Strike
The ILA is on strike for the first time in five decades following unsuccessful negotiations to increase wages by 61.5% over the next six years, amid increased automation and record profits for container line companies.
The strike will stop the flow of goods for many companies until an agreement is reached. It could also impact U.S. exports.
Analysts estimate that the stoppage could result in daily losses of $3.8 to $4.5 billion, affecting major ports such as New York/New Jersey, Houston, and Baltimore. The impact on perishable goods will be immediate, with bananas being especially vulnerable. Currently, three-quarters of U.S. banana imports pass through the ports affected by the strike.
For a global perspective on this topic, there is a graphic available on the busiest ports in the world.
Bottom Line
The U.S. port strike has the potential to significantly disrupt the flow of goods, impacting a wide range of industries and leading to billions of dollars in losses. The situation is a reminder of the interconnectedness of global supply chains and the potential vulnerabilities they face. What are your thoughts on this situation? Feel free to share this article with your friends and discuss. Also, consider signing up for the Daily Briefing, which is available every day at 6pm.
