With U.S. port workers on strike as of Tuesday morning, consumers around the world тАФ and especially in Canada, with its close trade ties to the U.S. тАФ could soon start seeing a shortage of goods or an upward tick in prices.
Everything from fruits and vegetables to imported vehicles and electronic equipment could be impacted by the strike, which is led by dockworkers on the U.S. East Coast and Gulf Coast.
The International Longshoremen’s Association (ILA) union, which represents 4,500 workers, is striking for higher wages after negotiations┬аwith employer group United States Maritime Alliance (USMX) fell through.
Experts who spoke with CBC News generally agreed that Canadian consumers could feel some┬аimpact from the strike, which will cut U.S. ocean shipping in half and is expected to cost the U.S. economy billions of dollars a day.
“A disruption in these ports significantly, significantly impacts that supply chain and the availability of those goods in Canada more generally,” said Pascal Chan, senior director of transportation, infrastructure and construction at the Canadian Chamber of Commerce.
Produce, retail and cars
Chan said┬аthe strike will particularly impact the import of perishable goods┬атАФ especially produce┬аthat isn’t grown in Canada or is currently out of season, which could be low in supply or get more expensive.
Retail is also a concern ahead of the busy Christmas season. Companies usually try to get their holiday inventory in early before the shopping rush begins, noted Chan.
“Anything that significantly disrupts transportation infrastructure in the U.S. has impacts on the global economy, and that’s really magnified here in Canada given the significant two-way trade and deeply integrated supply chains between our two countries,” he said.
“I think that we’ll start to feel it very, very quickly either in shortages of goods or in prices. Because if we’re not able to get what we need, that puts increased cost pressures on a lot of these goods.”
The automobile industry will also be affected. Those who have ordered foreign-made cars will feel the effects first, and car parts will be affected soon after, said┬аFlavio Volpe, president of the Automotive Parts Manufacturers’ Association.
The┬аEast Coast ports service all imported auto brands into Canada, according to Volpe.
Some companies have also notified customers that they’re applying an additional surcharge on future shipments. Container shipping giant Maersk, for example, has said it will introduce a disruption surcharge of up to $3,780 US a container, while shipper MSC┬аhas said that it will implement an emergency operation surcharge of up to $3,798 US per container.
If you like to eat, eat, eat,┬аpineapples and bananas…
Canadians might see a shortage of certain┬аfruits and vegetables over the next few days,┬аwith┬аpineapples and bananas likely among them, said Fraser Johnson, a professor of operations management at Western University in London, Ont.
“Something close to 80 per cent of the bananas that are shipped into the U.S. come in through the East Coast,” he said.┬а
And at some point, bananas might not reach us at all.
“We will, if it goes on for a prolonged period of time, maybe see shortages of products, consumer goods, clothes, electronics and automobiles being shipped into North America,” Johnson said.
Members of the International Longshoremen’s Association, some 45,000 workers at ports from Maine to Texas, are on strike, a shipping shutdown that could cost the economy up to $4.5 billion US a day.
Anthony Formusa,┬аpresident of fruit and vegetable importer and distributor National Produce Marketing Inc., says some of his pineapples and mangoes are already stuck in shipment limbo.
“The delays are resulting in our inability to bring the product in to satisfy the demand that we have and satisfy our customer orders,” he said.
Given that the food the company┬аimports is perishable and being shipped across long distances тАФ some of it tropical fruits from South and Central America, or Spain, Morocco and Egypt┬атАФ “every day that the product is delayed has an impact on the shelf life of the produce itself.”
“Hypothetically┬атАж┬аa three-day strike will result in a 15-day delay in┬аthe unloading of that of our container,” Formusa said.
“And 15 days┬аwould definitely suggest that the produce would have no market value. So there’s a lot of potential loss that we have at stake.”
While Formusa notes that his company gets some of its goods shipped to ports in Delaware and New Jersey, and to the Port of Philadelphia, the latter is partly untouched by the strike because some of its workers are represented by a separate union.
Bondi Produce, the largest food service distributor of fresh produce in Ontario, is only expecting minor disruptions, according to its vice-president Matt DuPerrouzel. The company makes over 1,000 deliveries a day.
“We’ve had conversations with our banana importers, we’ve had conversations with our pineapple importers,” said DuPerrouzel.┬а
“I would say 90 per cent of our produce, especially going into the offshore season like now, will come into the Port of Philadelphia. It’s one of the major produce hubs that we use in North America.”
The company is expecting only a marginal rise in prices. “We don’t have anyone blowing the horns or raising massive red flags on availability and we’re not seeing any drastic increases,”┬аDuPerrouzel said.
