Many Long Island business owners are anxiously monitoring a strike by East Coast dockworkers that could severely impact their ability to get products and materials from overseas.
Dockworkers at 36 ports from Maine to Texas went on strike on Tuesday in a dispute over wages and job protection from automation, as the contract between the ports and some 45,000 members of the International Longshoremen’s Association (ILA) expired.
The strike, the union’s first since 1977 when the walkout lasted nearly four weeks, could disrupt the region’s supply chain and rekindle inflation, especially if the job action drags on.
Though Long Island doesn’t have its own international port, many businesses here rely on East Coast ports for shipments from other countries.
“It’s a frustrating situation and we’ll be impacted,” Vincent Valentino, principal at Farmingdale-based Custom Door & Mirror, told LIBN. “We import 35 or 40 containers a year. Right now, we have a container on the water arriving on the fifth of October and that container is 100-percent paid for and we won’t receive it, so now we have to go replace it.”
Valentino said his firm had been anticipating the dockworkers walkout, so the company recently raised its inventory levels.
“You’re ordering this stuff 12 to 20 weeks ahead of time, so we were preparing for it,” he said. “Even this container that’s coming on the fifth is excess inventory that we just couldn’t get here in time to beat the strike.”
Another Long Island company, West Babylon-based Egress Pros, installs code-compliant egress windows and walkouts and most of its products are made in the U.S, though the firm’s windows come from Turkey.
“On average we import a 40-foot container of windows every two to three months,” said company principal Randy Goldbaum. “Depending on how long the port workers are on strike will determine the impact on our business. We always keep a minimum of two months’ supply on the floor. This was a lesson we learned during COVID. We must have inventory to service our customers.”
The longshoreman’s union is seeking a 77 percent salary increase over the life of the next six-year contract. Currently, ILA members make a base salary of about $81,000 per year, though that can climb to more than $200,000 annually with large amounts of overtime.
“The impacts of the port strike will most definitely reverberate to both businesses and consumers on Long Island, and companies will have to navigate the immediate challenge of sourcing goods and figuring out how to get shipments to customers,” said Matt Cohen, president and CEO of the Long Island Association. “While we hope that it is resolved quickly by the two parties, the federal government may need to intervene, so our economy does not feel any long-term effects.”
Kaushik Sengupta, chair of Department of Management and Entrepreneurship at Hofstra University’s Zarb School of Business, said the dock strike is unprecedented since there hasn’t been one like this in a very long time.
“In fact, the last big one was the West Coast port strike more than 20 years back,” he said. “The cost for a prolonged strike is going to be enormous, the economic hit from that strike was about $1 billion a day, and it took a long time for the operations to return to normal. And this affects almost everything we use, and companies use to make their products, food, autos, parts, you name it, those are all affected.”
Mohammad Delasay, associate professor of Operations Management at Stony Brook University’s College of Business, said if the strike lasts a while, Long Island’s economy and supply chains will face significant disruptions, including delays in receiving goods, rising transportation costs, and higher consumer prices.
“Sectors like fresh produce, seafood, tourism and healthcare may experience shortages, while construction projects and local farmers could face material and supply delays,” he said. “With the holiday season approaching, shipment delays could reduce the availability of holiday goods, affecting sales for local retailers. Despite potential inflation and employment impacts, energy supplies will remain stable. The strike’s overall effect will depend on its duration and businesses’ mitigation strategies.”
Terri Alessi-Miceli, president and CEO of HIA-LI, said the potential disruption caused by a prolonged dockworkers strike is “deeply concerning” for the area’s business community.
“A strike at this scale could severely impact supply chains, leading to shortages and increased costs that will affect businesses and consumers across Long Island and beyond,” she said.
Those involved in Long Island’s industrial real estate sector are keeping close tabs on the dockworkers strike.
“In the commercial real estate world, particularly for clients in the third-party logistics and warehousing sectors, there is growing concern about how these disruptions will affect their ability to manage inventory and meet customer demand,” Mario Asaro, principal of Industry One Realty said. “While the strike may temporarily affect warehousing needs, it could also lead to strategic adjustments in how businesses use real estate to mitigate future risks. Warehousers might seek to diversify their locations or expand storage capacity to create a buffer against future disruption.”
And some in the healthcare field also have trepidation about the possible impacts of the longshoremen work stoppage.
“It is a little early, so we’re not 100 percent sure yet, however, we know that the potential exists for our supply chains to be disrupted particularly with medical supplies and certain food products,” said Michael Tretola, CEO of Kings Park-based St. Johnland Healthcare. “And similar to any other business, consumer goods such as computers and electronics could be affected as well.”
Meanwhile, businesses that import goods through the ports are hoping for a quick settlement to the strike.
Goldbaum said if the strike lasts for two months or longer Egress Pros may be impacted on a few fronts including but not limited to inventory shortages, installation delays, supplier relationships and potentially increased cost of goods.
“We’ve got enough material to last us five or six months,” Valentino said. “Some of it we can replace locally, but some of it we have dyes made overseas through aluminum extrusions and we’re not sure what we’ll do if it goes long.”
Tim Binkis, chief client success officer for Hicksville-based ICC Logistics Services, said no one really knows how long the strike will last.
“But what we do know is that the government cannot afford to have this strike go on for the long term, which I define as more than two weeks,” he said. “In this election year, the government obviously does not want to rattle any union employees by imposing back to work regulations. On the other hand, any prolonged strike would further damage the U.S. economy, another major issue for the government.”
Binkis added that he doesn’t think there will be any major shortages of retail goods unless there is a prolonged strike.
“However, companies that export perishables will obviously be negatively affected, and may need to sell more products locally,” he said. “I also believe that we will see some ‘panic buying’ at the grocery stores and drug stores based on a combination of the effects of this strike as well as weather issues while we are in hurricane season.”
The Associated Press contributed to this report.