The first East Coast and Gulf Coast port strikes since 1977 have begun.
Workers picketed at 12:01am today as the International Longshoremen’s Association (ILA) and the United States Maritime Union (USMX) failed to reach an agreement before the six-year prime contract expired last night. The union and USMX have clashed publicly in recent months over wages, benefits and automation.
This morning, National Retail Federation (NRF) President and CEO Matthew Shea issued a statement calling on the Biden administration to step in to stop the strike.
NRF urges President Biden to use all available powers and tools—including the use of the Taft-Hartley Act—to immediately restore operations at all affected container ports, bring all parties back to the negotiating table and ensure that no Further interference occurs.
—Matthew Shay, President and CEO, National Retail Federation
While the strike’s overall financial impact on the U.S. toy industry is unclear, estimates of the strike’s overall impact on the U.S. economy vary. A week-long shutdown could cost the economy $3.78 billion, according to the Conference Board, while increasing inflation as consumers contend with rising product costs across the board.
“At a critical moment in our nation’s economic recovery, disruption of this magnitude would have devastating consequences for American workers, their families and local communities,” Shea added. “After more than two years of runaway inflationary pressures, And as we recover from Hurricane Helene, this strike will cause further hardship for American families. The government must prioritize our economy—and the millions of Americans who depend on it for their livelihoods and well-being—and intervene immediately. , to prevent further hardship and deeper economic consequences.
Yesterday, the National Association of Manufacturers (NAM) also called on President Biden to invoke the Taft-Hartley Act to reopen ports while negotiations continue.
“The president can use his authority to protect manufacturers and consumers, and we hope he will act quickly,” said NAM President and CEO Jay Timmons.
So far, Biden has resisted the idea, telling reporters on Sunday, “This is collective bargaining. I don’t believe in the Taft-Hartley Act,” according to CNBC.
Toy industry worries, preparations, echoes of the past
The build-up to this year’s presidential election between Vice President Kamala Harris and former President Donald J. Trump mirrors those of several years ago, with talk of tariffs, inflation and rising freight costs once again dominating the headlines. According to the NRF, an 11-day strike at West Coast ports in 2022 could cost the U.S. economy $1 billion a day while causing congestion for up to six months.
Although there are nuances, the port strike poses several challenges for the U.S. toy industry. Most major toy manufacturers and their retail partners have already imported a significant portion of their holiday season orders — primarily through West Coast ports, with record imports this summer. The impact on retail appears to be non-existent today, but with shipments still stranded on the water, any restocks of less popular products could be in jeopardy.
The strike could severely disrupt the U.S. toy industry, which contributes $157.5 billion to the economy, by disrupting supply chains and preventing important holiday goods from reaching shelves in time. The Toy Association is part of a coalition of affected industries that continues to urge the Biden administration to immediately intervene in this issue and help the ILA and USMX reach a resolution at the bargaining table as quickly as possible.
—Greg Ahearn, President and CEO, Toy Association
The 2025 post-holiday new product reset and spring sales season may also be delayed, leaving shelves empty in January.
Meanwhile, the industry’s razor-thin margins could also be tested again if air freight is needed to replenish holiday restocks. In this case, shippers such as FedEx, UPS and DHL may come to the rescue during the busiest seasons at high cost.
“Who’s going to win in the long run?”
Last month, the ILA posted a video on YouTube in which union president Harold J. Daggett shared his thoughts on multiple topics, concluding with a stern warning for USMX and the companies it supports.
“Who’s going to win in the long run?” Daggett asked. “You better sit down, let’s sign a contract, and move on. In today’s world, I’m going to weaken you. I’m going to cripple you. You don’t know what that means. No one does that!
toy book Port conditions will continue to be monitored over the coming days.
