The ongoing dockworkers’ strike along the East Coast and Gulf of Mexico has yet to create major consumer disruptions. Still, experts warn that significant economic ripples will emerge if the strike extends beyond two weeks. Prices on certain goods will rise, inventories will dwindle, and delivery times will slow, particularly impacting the holiday shopping season and small businesses already struggling with narrow margins.
A strike lasting more than two weeks could lead to severe delays that might take months to resolve, said Jonathan Gold, vice president of supply chain and customs policy at the National Retail Federation. “A one-day shutdown can take three to five days to recover from. If the strike lasts two weeks, recovery could stretch beyond the holidays,” he noted.
The International Longshoremen’s Association, representing 47,000 workers, initiated the strike after negotiations with the U.S. Maritime Alliance fell apart in June. The union is demanding significant wage increases and job security against automation, while the Maritime Alliance countered with a 50% pay raise over six years. As the holiday season approaches, retailers feel pressured by the strike, impacting 50% of imports traveling through East and Gulf Coast ports.
Retailers prepare, but small businesses face greater risk
Larger retailers like Costco and Ikea have anticipated the disruption for months, accelerating holiday inventory orders and rerouting shipments through West Coast ports. For instance, Ron Vachris, Costco’s chief executive, outlined their contingency plans during a recent earnings call, emphasizing efforts to “pre-ship” goods and clear the ports in preparation.
However, small and medium-sized businesses, which lack the financial resources to adjust shipping schedules or stockpile inventory, are bearing the brunt of the strike. Many smaller businesses were unaware of the looming walkout, leaving them vulnerable to rising freight costs and delayed shipments. Lisa-Jae Eggart, co-founder of 3 Moms Organics, shared her concerns about delayed orders, fearing that the backlog at West Coast ports could disrupt her holiday sales.
“This could really blow up small businesses with thin profit margins,” Eggart said, noting that customers will ultimately bear the cost of these disruptions.
While big-box stores may not immediately feel the pinch, smaller businesses and consumers will soon notice price hikes, especially on perishable items like bananas, seafood, cocoa, and coffee, said Patrick Penfield, a professor of supply chain practice at Syracuse University. These products, typically imported daily, will face the most immediate disruptions.
Additionally, inventory shortages and higher prices on goods like toys, apparel, cosmetics, and sports equipment could impact holiday shopping—key gift categories that are heavily reliant on imports. A continued strike could temper retail sales projections, which had been set for record highs this holiday season, with Americans expected to spend up to $993 billion.
Small businesses reliant on seasonal sales, such as department stores and toy retailers, are particularly vulnerable. Ben Johnston, Kapitus’s chief operating officer, warned that smaller stores could struggle to keep pace with larger competitors, exacerbating financial strain during the crucial holiday period.
Long-Term Concerns for Small Retailers
For small retailers like Danny Reynolds, owner of Stephenson’s of Elkhart in Indiana, the strike could cause long-term delays, especially for products like wedding dresses, which take months to manufacture and ship. “We’re concerned about our spring merchandise, which usually arrives at the end of the year,” Reynolds said. If the strike continues, smaller businesses like his could be left waiting as bigger companies take priority at the ports.
The strike, though localized to ports, has wide-reaching consequences for the global supply chain, according to Pawan Joshi of the supply chain platform e2open. “It’s a domino effect. This port strike could disrupt everything from manufacturing to retail across the globe.”
