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Hurricane damage and a port strike could deal a blow to the U.S. economy
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Hurricane damage and a port strike could deal a blow to the U.S. economy

  • A looming port strike and the aftermath of Hurricane Helene could slow the movement of US goods.
  • The strike could begin on October 1 and involve 45,000 longshoremen demanding higher wages.
  • The combined disruptions could cost $5 billion a day and worsen inflation, analysts say.

The U.S. could be in for a hell of a time trying to move goods across much of the country.

Hurricane Helene has killed nearly 100 people and left devastation in several states, including widespread flooding damage that could leave cities like Asheville, North Carolina, without running water for weeks.

The flooding and debris, including fallen trees, have left many roads and highways in the southeast impassable or at least difficult to navigate.

Now, a looming port strike could also slow the movement of essential goods and supplies to, from and through the United States – causing a devastating economic blow.

A strike among dock workers stretching from the East Coast to the Gulf Coast could begin Tuesday. The International Longshoremen’s Association said Sunday it was prepared to strike on Oct. 1. The country’s largest maritime workers’ union is demanding, among other things, higher wages.

Jon Davis, chief meteorologist at Everstream Analytics, which focuses on supply chain risks, told Business Insider that the storm and possible strike would have massive “exacerbating impacts.”

“It’s not one plus one equals two. One plus one is much more than that,” he said.

JPMorgan analysts have estimated that costs from the strike-related shutdowns could rise to $5 billion a day.

It would be the first project since 1977 to span an entire U.S. coastline and include ports that account for about half of the country’s maritime shipping. Some 45,000 workers could lay down their metaphorical tools; In addition to causing catastrophic damage to infrastructure in hard-hit states like Florida, Georgia and North Carolina, it would undoubtedly slow the movement of essential goods, including food and vehicles.

An inflation driver

Any slowdown in key U.S. supply chains could also stoke inflation at a time when the Federal Reserve has begun cutting its key interest rate to prevent the economy from sliding into recession. Price increases have moderated year on year, but remain high for certain goods such as eggs, which have risen sharply due to bird flu.

Amir Mousavian, a professor of supply chain management at the University of New England College of Business, said the impact of a strike would depend on how long it lasted, but the potential consequences were significant.

He told BI that perishable goods would be affected almost immediately and that shortages at grocery stores could trigger panic buying – similar to what happened during the pandemic.

Shipping costs could also rise as companies look for alternative ways to get goods to their customers, such as importing and exporting goods from the West Coast.

“The timing of the strike is particularly concerning given that the U.S. economy has made progress in reducing inflation. A prolonged strike could erase these gains and force the Federal Reserve to rethink its economic strategy and potentially reimpose more restrictive measures,” Mousavian said.

A supply chain that is not resilient

He said the situation was a reminder of what the pandemic has clearly shown — that the U.S. supply chain is “efficient but not resilient.” A strike would also serve as a reminder of the need for stronger and more adaptable supply chains to withstand future crises, Mousavian said.

Jason Greer, president of Greer Consulting Inc. and a former National Labor Relations Board official, told BI that the labor dispute is likely to happen and that combined with the hurricane’s aftermath “will have devastating consequences overall.”

He said he expected the union to leave because members felt their concerns had not been taken seriously for too long.

“The longshoremen said: ‘We continue to be pushed aside. We continue to be pushed aside. We will no longer be pushed aside.’ “So I think the overall economic damage is enormous,” Greer said, also pointing to impacts such as higher food prices.

Meanwhile, Angela Blanchard, Houston’s chief recovery and resilience officer, noted on She noted that the disruptions at ports would limit the availability of materials and fuel – and impact prices.

“This will be a long and complicated recovery season,” Blanchard wrote.