Pricier pineapples? Here’s how the U.S. port strike could impact your wallet
With U.S. port workers on strike as of Tuesday morning, consumers around the world — and especially in Canada, with its close trade ties to the U.S. — 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 45,000 workers, is striking for higher wages after negotiations with employer group United States Maritime Alliance (USMX) fell through.
Experts who spoke with CBC News generally agreed that Canadian consumers could feel some impact 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 the strike will particularly impact the import of perishable goods — especially produce that 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 Flavio Volpe, president of the Automotive Parts Manufacturers’ Association.
The East 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 has said that it will implement an emergency operation surcharge of up to $3,798 US per container.
If you like to eat, eat, eat, pineapples and bananas…
Canadians might see a shortage of certain fruits and vegetables over the next few days, with pineapples 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.
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.
As dockworkers on the U.S. East Coast and Gulf Coast go on strike, analysts say the disruption could cost billions of dollars if it persists. Andrew Chang breaks down the potential domino effect on the U.S. economy, and why despite the high stakes, it may not be as severe as it seems.
Images supplied by Getty Images and Reuters.
Anthony Formusa, president 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 imports is perishable and being shipped across long distances — some of it tropical fruits from South and Central America, or Spain, Morocco and Egypt — “every day that the product is delayed has an impact on the shelf life of the produce itself.”
“Hypothetically … a three-day strike will result in a 15-day delay in the unloading of that of our container,” Formusa said.
“And 15 days would 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.
“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,” DuPerrouzel said.
