Looming port strike could slam a fragile system, says customs broker

Dockworkers on the East and Gulf coasts are threatening to strike Tuesday, when a labor contract between port terminal operators and the International Longshoremen’s Association expires.

A strike taking out the ports for the entire East Coast would be no joke. Analysts estimate that it could cost the economy $5 billion a day, and for each day the ports are shut down, it would take an estimated six days to clear the backlog.

Gretchen Blough, a customs brokerage manager with Logistics Plus in Erie, Pennsylvania, knows that it’s rarely smooth sailing in the world of global shipping. She joined “Marketplace’s” Kai Ryssdal to put the strike and other factors affecting global trade in context. An edited transcript of their conversation is below.

Kai Ryssdal: How closely are you watching this potential strike on the East Coast?

Gretchen Blough: Oh, very closely, because it’s going to make a mess if it happens.

Ryssdal: So, keep going. If this strike starts as planned, what does your next day in the office look like?

Blough: I mean, we’re trying to stay ahead of things, and it’s all a question of timing. If things hit the port at a point where we can do the customs entries and get them moving out of the port prior to the strike, that’s what we’re planning on doing, and it’s all a question of how long the strike is. If it’s only going to last a week, then we’re kind of in a holding pattern because there’s no point in rerouting stuff because things will actually take longer to arrive at their destination if that’s the case. And the options are limited as to rerouting. We could take things through Canada, but they don’t have quite the infrastructure up there to handle everything if everything moves up to Montreal or whatnot. And then there are more customs filings that will need to be put in place so that it doesn’t have to clear in Canada [so] that it can travel inbound to the U.S. So we’re hoping, if this does happen it will be short-lived, As we saw with the bridge in Baltimore when we had to reroute it, because we knew it was long-term, things got congested in the Port of New York and whatnot.

Ryssdal: So we should point out that a strike that lasts a week does not mean it’s only a week of backups and backlogs, right?

Blough: Right, because all that congestion has to clear. And on top of that, we’re looking at the steamship lines charging congestion fees of several thousand dollars a container.

Ryssdal: A container! That’s a lot.

Blough: Yes, that’s a one-time cost. Some of the ports are waiving storage if a strike happens, but some of the steamship lines are not, and [if] you can’t get your container out, they’re going to continue to charge storage on everything.

Ryssdal: Are you seeing companies hustling to get their stuff into the port and then out and into the economy before the deadline hits?

Blough: Yes, but there’s only so many trucks available. One thing we’re seeing is on the export side is that if you’re not in the port by, I want to say the 27th, so in two days, and your container isn’t scheduled to be on a ship prior to the 1st, they’re telling people just don’t even show up or come and get your container because then the storage will start on the export side.

Ryssdal: Wow, do you have, like, a file folder on your computer that just says open in case of strike?

Blough: No. I mean, everything’s basically kind of a pivot that we do in logistics. I mean, in addition to this strike, we also have Hurricane Helene coming. So, I mean, it’s gonna be an interesting few weeks here.

Ryssdal: How long you been doing this, Gretchen?

Blough: I’ve been doing customs brokerage itself for 10 years, and I’ve been working in logistics for 16.

Ryssdal: Situate me historically. Are things tighter now? Is the supply chain more fragile now, in your experience, than it was, you know, 15, 20 years ago?

Blough: I think it is because we have less in terms of trucking options. We’ve had a number of bankruptcies in the trucking industry. So deliveries are a bit tighter. We’ve seen some mergers on the steamship lines as well. So I think it is much more fragile than it used to be. We have different regulations as far as customs goes for forced labor, the China duties, the steel and aluminum tariffs, the solar panel tariffs. You know, it all adds up.

Ryssdal: Not to take a turn to the political, but since you did bring it up, I imagine you’re, without, you know, judging one way or the other, I imagine you’re watching the election too, right?

Blough: Oh, for sure. China doesn’t pay the tariffs. Tariffs will come down to the American consumer. So it’s a bit concerning, considering what’s being bandied around out there.