By Brian Womack
Reprinted – by Texas Metro News
Website: https://www.dallasnews.com/
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 very affect 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.
”The longer this goes on, the more disruption there’s going to be,” said Jesse Thompson, senior business economist, Federal Reserve Bank of Dallas, Houston branch.
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.
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, professor, operations management, at 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.”
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.
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.
There will be broad costs of some kind, experts say. For example, a one-week strike could cost the US 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.
”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.”
| This story, originally published in The Dallas Morning News, is reprinted as part of a collaborative partnership between The Dallas Morning News and Texas Metro News. The partnership seeks to boost coverage of Dallas’ communities of color, particularly in southern Dallas. |
