Ships continue to arrive at shut-down terminals as the International Longshoreman's Association (ILA) strike enters day two. Already, panic has set in, and toilet paper and other paper products have flown off shelves from Texas to New York.
Mobile-based Page & Jones Inc. is heading up much of the logistics and diversion routes in six states, from Texas to Florida.
President and CEO Michael Lee told 1819 News that the business was similar to a travel agent but for cargo instead of people. The company finds the best routes, transit times and prices for clients.
Although Page & Jones was able to prepare, making adjustments was complex because supply chain arrangements are made far in advance. Some cargo was diverted to the West Coast, mainly imports from Asia. Even those imports will see a ripple effect, and business losses are expected.
"You know the production cycles and the costs of diverting from one port to another are pretty prohibitive," Lee told 1819 News. "So, I know a lot of the industry just had to sit back and hope that there was a settlement and hope that if there was a strike that it would be very short in duration, which would be good for everybody."
European imports are more difficult to divert, but Lee said logistically that some will be moved to Mexico and then railed to the United States.
Some items, including machine parts and high-tech equipment used for factory production, may be flown in, but Lee said air freight does not meet the volume demands and is more expensive.
Ships arriving in Mobile will have to anchor to wait out the strike.
"It's early yet to see any pile-up, but there will be a pile-up all up and down the coast of ships that are en route," said Lee. "They are now waiting to get their berths and discharge their cargo and pick up U.S. cargo going outbound. So, it hurts the U.S. exporters also."
Lee said the significant effects could include automotive, steel and forest goods. As for the toilet paper panic, Lee said there is no logic behind hoarding those products.
"I mean, that is one of the products we're the strongest in the U.S., an exporter of toilet paper," he said. "So, when no toilet paper can be exported, there's going to be more toilet paper than we can need, and that's true of all the paper products."
While the variety of products could be impacted, Lee said water and basic needs should not be affected.
"If you want some, especially fresh fruits and things that there's heavy imports from around the world, some of the food products would be affected," Lee explained. "But to me, it's not so much a shortage of the food product itself, it's maybe less variety on the shelves."
Page & Jones ensured most refrigerated containers arrived on the docks before the strike. However, Lee said some ships will still have perishable products, such as bananas.
While every day of the strike could equal six days of catch-up, he said people in the industry do not expect the strike to go very long. He hopes the economic impact will encourage the parties to settle since the Biden-Harris administration is not ending the strike by invoking the Taft-Hartley Act.
"The act itself says that the president can invoke that injunction if the labor stoppage is harmful to the economy or security of the U.S. Well, I don't know so much about the security part, but the economy is pretty obvious," Lee said.
"They're estimating two to five billion dollars a day it costs the U.S. economy," he added. "So, there's every reason in the world to invoke that, but the president said very clearly he's not going to do it."
In the meantime, Page & Jones is prioritizing making diversion arrangements.
To connect with the author of this story or to comment, email erica.thomas@1819news.com.
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