The longshoremen's strike is historic - when will it affect store shelves in Texas?

Will the strike also hit shuttered ports from Texas to Maine in the Dallas region?

The work stoppage, which began hours ago when thousands of longshoremen walked off the job, could impact shelves at local Dallas-area stores, but not immediately, experts say. That could mean how many products are available and possibly even prices, observers say.

“The longer this goes on, the more disruption there will be,” said Jesse Thompson, senior business economist at the Houston branch of the Federal Reserve Bank of Dallas.

At midnight Monday, the contract between the ports and about 45,000 members of the International Longshoremen's Association expired – despite progress being reported in talks earlier in the day.

At Port Houston, at least 50 workers began picketing, carrying signs that read, “No work without a fair contract.” The strike, affecting 36 ports, is the union's first since 1977.

Buyers may be looking for a resolution sooner – a matter of days – rather than later. Potential product shortages that could occur sooner could range from bananas to clothing to cars.

“Consumers may be concerned if the strike lasts longer than a week,” Metin Cakanyildirim, a professor of operations management at the University of Texas at Dallas, said in an emailed response to questions. “A prolonged strike may result in unavailability of materials/products and supply chains cannot easily find alternative modes of transport to replace sea transport.”

The shortages could affect “critical, unique and moderately expensive” items, Cakanyildirim said. However, cheap and common products can escape these challenges because they can be sourced elsewhere.

The industry has prepared for a possible blow. According to Jonathan Gold, vice president of supply chain and customs policy at the National Retail Federation, in a statement last month, many retailers were bringing their cargo in early and moving it to alternate ports as a precaution.

“We know that retailers and businesses across the landscape have brought forward many of their container movements this year,” Thompson said. “There are supplies; there are fall products; There are Christmas and seasonal items that were confiscated before the strike to minimize some of the damage. But we don’t know how robust this inventory is against the failures.”

Perishable goods are more likely to be affected by extended shutdowns that prevent container ships from offloading goods efficiently, Thompson noted.

According to Jean-Paul Rodrigue, a professor in the Department of Maritime Business Administration at Texas A&M University-Galveston, D-FW has the advantage of being less dependent on the East and Gulf Coasts than many large cities in the eastern United States. Locally, 44% of shipping containers entering or leaving the metro are connected to the Port of Los Angeles and Long Beach on the West Coast. Nevertheless, the region is being affected by these disruptions.

“Adjustment will be very difficult because many traders, especially retailers, will be competing for available capacity,” said Rodrigue, who also noted that about 56% of container volume handled in the continental U.S. will be affected by the strikes.

A strike that lasts longer than a week would see shortages in almost all sectors, Rodrigue said.

As far as price developments are concerned, there could be pressure, but it is difficult to provide clarity.

“It’s really hard to say,” Thompson said. “But there will be some continuity.”

Cakanyildirim said price changes depend on many macroeconomic factors that have a greater impact than problems at the docks. The professor does not expect price increases as a result of the strike.

Rodrigue said the danger is to the economy.

“Even if transportation accounts for about 5 to 10% of the retail price of a good, if a good becomes scarce because it is stuck on a ship or in a warehouse somewhere, prices will certainly rise for as long as the shortage continues,” Rodrigue said. “For example, 98% of all coffee imported into the United States is transported by container.”

If the strikes last longer than two weeks, the situation will become almost untenable, Rodrigue said, and that would require federal government intervention.

Experts assume that there will be significant costs. For example, a week-long strike could cost the U.S. economy $3.78 billion, according to a Conference Board report.

Whatever the case, businesses are in better shape today than they were during the difficult days of the COVID-19 surge, Thompson said.

“Companies have invested heavily in supply chain resilience since the pandemic,” Thompson said. “In many ways there is actually excess capacity compared to where we would have been a few years ago if that had happened. Our ability to move things and somehow optimize our inventory levels is probably in relatively good shape.”