With no talks in the works to avoid it, thousands of dockworkers at every major East and Gulf Coast port are girding to strike in less than 24 hours, threatening to close trade gateways that handle about half of all goods shipped in containers in and out of the U.S. With over 14 ports expected to close, we talked to SEVERAL of the nations largest ammunitions importers, who have all agreed, that this will be devastating to the US Ammo supply chain. This will affect MILLIONS of rounds of ammunition, and even more in components, like primers, projectiles, and powders. Like in previous supply chain shortages, this shortage will have a ripple effect in distribution.
We have seen this ripple before, with shortages in primers and .22LR. The US ammo consumer will expect to see higher prices, less availability and longer wait times, which are projected to last for months. There will be a shortage, and the only thing to do is stay ahead of it.
With a 1-2 week strike expected, the fallout of the backup in shipping starts with components and ends with most of the Turkish ammo brands. It’s expected to dry up most of the more economical options in ammo, which will last into the end of Fall Hunting Season. The ripple effect is projected to last 1-2 Months and will undoubtedly affect ammo prices coming in from the West Coast, causing ammo prices to rise until distribution lines are re-established. The West Coast importation isn’t able to logistically cover this kind of backup. This means that brands like PMC and such, while not directly hindered by the strike, will also see price inflation due to lack of availability.
Of course, it’s not only ammunition and components affected, many large bulk materials and imported goods across all ranges of the US market are going to take a huge hit!
If you aren’t paying attention to the news here are the KEY POINTS you have missed:
- Trucking companies and freight rail operators are scrambling to move billions in trade that has been arriving at the 14 ports where the largest longshoremen’s union in North America is planning to strike after midnight Monday if a new contract is not reached with ports management.
- For the week ended last Friday, nearly $14 billion in trade arrived at these ports, including New York/New Jersey, Baltimore, Norfolk, Virginia, Savannah, Georgia, Miami, New Orleans and Houston, with $2.7 billion in trade arriving on Friday alone.
- The International Longshoremen’s Association (ILA) said in a statement on Monday that its wage demands were still not being met and blamed ports management for a strike that will start at 12:01 a.m. ET on Tuesday, Oct. 1. “Time isn’t on the side of importers,” a logistics CEO tells CNBC.
WASHINGTON, Sept 29 (Reuters) – A port strike on the U.S. East Coast and Gulf of Mexico will go ahead starting on Tuesday, the International Longshoremen’s Association union said on Sunday, signaling action that could cause delays and snarl supply chains.
“United States Maritime Alliance … refuses to address a half-century of wage subjugation,” the union said in a statement. The United States Maritime Alliance, known as USMX, represents employers of the East and Gulf Coast longshore industry.
USMX did not immediately comment.
If union members walk off the job at ports stretching from Maine to Texas, it would be the first coast-wide ILA strike since 1977, affecting ports that handle about half the nation’s ocean shipping.
A source said no negotiations were taking place Sunday and none are currently planned before the midnight Monday deadline. The union said previously the strike would not impact military cargo shipments or cruise ship traffic.
Reuters first reported on Sept. 17 that Biden did not plan to invoke the Taft-Hartley provision, citing a White House official.
A strike could stop the flow of everything from food to automobiles at major ports – in a dispute that could jeopardize jobs and stoke inflation weeks ahead of the U.S. presidential election.
“A port strike could cost the U.S. economy billions of dollars a day, hurting American businesses, workers and consumers across the country,” Business Roundtable CEO Joshua Bolten said in a statement this weekend. “We urge both sides to come to an agreement before Monday night’s deadline.”
The White House outreach continued through the weekend, White House spokesperson Robyn Patterson said on Sunday.
“This weekend, senior officials have been in touch with USMX representatives urging them to come to a fair agreement fairly and quickly — one that reflects the success of the companies. Senior officials have also been in touch with the ILA to deliver the same message,” Patterson stated.
Experts say a shutdown could severely hamper the flow of goods and raise shipping costs. Any spike in such expenses could be passed on to consumers just as U.S. inflation normalizes, and even potentially hinder the Federal Reserve as it finally pivots to lowering interest rates.
Here’s what to know about the labor fight, which would be the first mass work stoppage at eastern ports in nearly half a century.
A strike would reduce U.S. economic activity by between $4.5 billion and $7.5 billion for every week it continues, according to analysts at Oxford Economics. The investment research firm estimates it would take up to a month to clear the backlog of shipments that pile up while ports remain shut.
Although West Coast terminals could absorb some cargo diverted from eastern ports, they couldn’t handle it all, nor could the U.S. rail system, experts say.
Should a strike persist longer than a month or so, some companies could face shortages of parts and other inputs. Much of the raw materials that go into a range of products flow through the East and Gulf Coast ports, such as cotton, wood and copper. The auto and pharmaceutical industries, which maintain lean inventories, could be affected, while port shutdowns in Miami and Norfolk could affect tobacco companies.
In addition, a strike could hamper shipments of products such as bananas, manufacturing components and plywood, interrupting the flow both of consumer goods and industrial parts for factories. Fresh meat and other refrigerated food could spoil, resulting in shortages and increased prices.