Many business owners on Long Island are anxiously monitoring a strike by longshoremen on the East Coast. This could have a significant impact on our ability to obtain products and materials from overseas.
Longshoremen at 36 ports from Maine to Texas will lose pay and benefits from automation Tuesday as a contract between the port and the roughly 45,000 members of the International Longshoremen’s Association (ILA) expires. They went on strike over a dispute over employment protection.
The strike is the union’s first since 1977, when it lasted nearly four weeks, and could disrupt regional supply chains and reignite inflation, especially if the employment measures drag on.
Although Long Island does not have its own international port, many businesses rely on East Coast ports for shipments from other countries.
“It’s a frustrating situation and we’re all going to be affected,” Vincent Valentino, principal at Farmingdale-based Custom Door and Mirror Co., told LIBN. “We import 35 to 40 containers a year. We currently have a container at sea that will arrive on October 5th, but that container is 100 percent paid for and cannot be picked up right now. It must be replaced immediately.”
Valentino said his company had recently increased inventory levels because it was anticipating a longshore worker strike.
“These things are ordered 12 to 20 weeks in advance, so we were preparing for that,” he said. “Even this container arriving on the 5th is overstock that couldn’t get here in time for the strike.”
Another Long Island-based company, Egress Pros, installs compliant egress windows and walkouts, and although its windows are made in Turkey, most of its products are made in the United States.
“On average, we import windows in 40-foot containers every two to three months,” said company president Randy Goldbaum. “How long the dockers’ strike lasts will determine the impact on our business. We always have at least two months’ worth of stock on hand. This was a lesson we learned during the coronavirus pandemic. We need inventory to serve our customers.”
The longshore workers’ union is seeking a 77% pay increase over the next six years of the contract. Currently, the base salary for ILA members is approximately $81,000 per year, but with significant overtime, the salary can reach more than $200,000 per year.
“The impact of the port strike will undoubtedly impact both businesses and consumers on Long Island,” said Matt Cohen, President and CEO. “We will have to overcome the immediate challenge of thinking about this,” he said. of the Long Island Association. “While we hope to see a swift resolution by both parties, federal intervention may be necessary, so we do not see any long-term impact on our economy.”
Kaushik Sengupta, chair of the Department of Business and Entrepreneurship at Hofstra University’s Zarb School of Management, said the dock strike is unprecedented because such a strike hasn’t happened in a long time.
“In fact, the last big one was the West Coast port strike over 20 years ago,” he says. “The costs of a prolonged strike were enormous, the economic damage from the strike was approximately $1 billion per day, and it took a long time for business to return to normal. It affects everything that we use and that companies use to make products, food, cars, parts, and more.”
Mohammad Delasay, Associate Professor of Operations Management Stony Brook University’s School of Business said that if the strike continues for some time, Long Island’s economy and supply chain will face significant disruptions, including delays in the arrival of goods, higher transportation costs and higher consumer prices.
“Sectors such as fresh produce, seafood, tourism and healthcare may experience shortages, while construction projects and local farmers may face delays in materials and supplies,” he said. “As the holiday season approaches, shipping delays could reduce inventories of holiday goods and impact local retailers’ sales.Energy supplies remain stable despite potential inflation and employment impacts. The overall impact of the strike will depend on its duration and the company’s mitigation strategy.
Terry Alessimiceli, president and CEO of HIA-LI, said the potential disruption caused by a prolonged longshoremen’s strike is “very concerning” to the region’s business community. “
“A strike of this magnitude could severely impact supply chains, leading to shortages and increased costs, impacting businesses and consumers across Long Island and beyond,” she said. Ta.
Officials in Long Island’s industrial real estate sector are closely monitoring the longshoremen’s strike.
“There is growing concern in the commercial real estate world, particularly for third-party logistics and warehousing customers, about how these disruptions will impact inventory management and their ability to meet customer demand.” Realty representative Mario Asaro said. Said. “While strikes may temporarily impact warehousing demand, they may also lead to strategic adjustments in how companies use real estate to reduce future risks. They may look to diversify their footprint or expand their storage capacity to create a buffer against future disruption.”
Some in the medical field are also concerned about the potential impact of the shutdown on dockworkers.
“While we are still not 100% sure as it is too early to know, we do know there is potential for supply chain disruption, particularly for pharmaceuticals and certain food products,” Kings Park CEO Michael Tretra said. said. St. John’s Land Healthcare, based in . “And like any other business, consumer goods such as computers and electronics may be affected.”
Meanwhile, companies that import goods through the port hope for an early resolution to the strike.
Goldbaum said that if the strike lasts longer than two months, Egress Pro will be affected in several ways, including, but not limited to, inventory shortages, installation delays, supplier relationships, and potentially higher product costs. He said there is a possibility of receiving it.
“We have enough material to last five to six months,” Valentino said. “Some of them can be replaced locally, but some of them use dyes that are manufactured overseas by aluminum extrusion, and we don’t know what to do with them over time.”
Tim Binkis, chief customer success officer for Hicksville-based ICC Logistics Services, said no one knows how long the strike will last.
“But what we do know is that the government cannot afford to continue this strike for a long time (more than two weeks by my definition),” he said. “In this election year, the government clearly does not want to disrupt unionized employees by imposing labor regulations. On the other hand, a prolonged strike would further damage the U.S. economy, and this This is a big problem for the government.”
Binkis added that he does not believe there will be a major shortage of retail goods unless the strike is prolonged.
“However, businesses that export fresh produce will obviously be negatively affected and may need to sell more of their products domestically,” he said. “I also believe there will be ‘panic buying’ at grocery and drug stores based on the impact of this strike combined with weather issues during hurricane season.”
The Associated Press contributed to this report.