Port Strike Postponed

The East and Gulf Coast ports strike that led to panic buying of toilet paper has been called off until January 15^th. While toilet paper is mostly produced domestically and thus would have been largely unmoved by the port strike, the availability and prices of some vegetables and fruits, such as bananas, would likely have been noticeably affected. Numerous goods come through ports daily; Moody’s Analytics estimated that the strike would cost the US economy $500 million per day initially, and $2 billion per day if the strike lasted for several weeks.

For now, though, the can has been kicked down the road. The good news is that the International Longshoreman’s Association and port ownership reached an agreement on wage increases; the bad news is that the crucial issue of automation remains far from settled. Government policy already throws up roadblocks to automation at ports; the union is seeking further restrictions on automation in its next contract. While the union is understandably trying to protect member jobs, it is noteworthy that US port efficiency, according to the World Bank, is considered to be relatively poor, with the best US port ranked 50^th out of 405 ports in the Container Port Performance Index:

If no agreement is reached by January 15^th, the incoming President may be dealing with a strike come Inauguration Day. While we’re not predicting the outcome of a potential strike, the new President, whether it is Donald Trump or Kamala Harris, may feel no need to curry favor with union voters with the election having just passed, and so may be unsympathetic to port disruptions at the very beginning of a new Administration.

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This material is not intended as an offer or solicitation for the purchase or sale of any financial instrument or investment strategy. This material has been prepared for informational purposes only, and is not intended to be or interpreted as a recommendation. Any forecasts contained herein are for illustrative purposes only and are not to be relied upon as advice.