PORTSMOUTH, Va. (WAVY) — If the strike that began Tuesday by the International Longshoremen’s Association becomes prolonged, expect to see shippers start moving vessels and containers to ports where they can be used — in short, out west.
The reverse happened two years ago when a labor dispute involving the ILA’s western counterpart, the International Longshore Workers Union, staged coordinated walkouts. While that union never authorized a full-blown strike, the walkouts were enough to disrupt port traffic in Los Angeles, Long Beach, Oakland and Seattle.
The strike is estimated to cost more than $4 billion a day in economic impact. If it’s settled quickly, what’s already in warehouses will help pick up the slack, according to Old Dominion University professor of supply chains, logistics and maritime operations Rafael Diaz.
International Longshoremen’s Association workers at Hampton and Terminal boulevards on day two of their strike for better wages and curbs in automation. (Photos courtesy of Charmaine Butler)
“We have inventories, and the inventories are able to absorb chunks of the disruption,” Diaz said in a Wednesday interview.
But if the strike by the ILA goes from days to weeks or even months, shippers will shift course and go with plan B.
“They’ll start moving resources and rerouting to the West Coast,” Diaz said.
Prices in the long run will increase because of higher transportation costs, and during any extended stoppage, shippers could move ships to where the containers can actually be used on the other side of the country.
That’s what happened in reverse when the ILA’s counterparts on the West Coast had coordinated walkouts two years ago that affected ports out there.
“You’re paying way extra for having those containers waiting there until the dispute is solved,” Diaz said, “but you cannot be waiting forever. It’s already costing money.”
If that happens, it will extend the time needed for operations at the Port of Virginia to fully recover once the strike is resolved. Any ships and containers that were repositioned during the ILA strike will have to return to the East Coast.
“Capacity takes time to build,” Diaz said.
President Joe Biden weighed in on the ILA strike Wednesday, commenting on port operators’ profits, saying they need to “get to the table and get this done,” but so far he has refused to intervene in the dispute.