new York
CNN
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If longshoremen at East and Gulf Coast ports go on strike Tuesday, as now seems likely, it could halt shipments of many popular products that pass through those docks. But not necessarily immediately.

Companies have watched nervously as Tuesday’s 12:01 a.m. strike deadline approaches, showing little sign of progress on an agreement to avoid a strike by tens of thousands of longshoremen. Many have done their best to prepare for the shutdown – but there are limits.

It makes neither economic nor logistical sense to transport many of the goods entering East Coast ports through alternative ports of entry – or by air.

That means America could face shortages of chocolate, alcohol, popular fruits like bananas and cherries, and even certain cars if the strike continues for an extended period of time. That could mean higher prices for the goods available.

First, the good news: Your holiday shopping may not be affected as much as you might fear. Typically at this time of year, 70% of the goods that retailers stock for the holidays are already shipping through the ports. And because of the threat of strikes, this percentage is much higher this time.

“Typically the peak shipping season runs from July to early November. They’ve definitely pushed back their schedule this year, starting in late May or early June,” Jonathan Gold, vice president of supply chain and customs policy at the National Retail Federation, told CNN.

However, Gold said he couldn’t say all the goods retailers plan to offer holiday shoppers have already arrived. “There are restrictions that can be introduced at any time,” he said. And the association and its members are worried about how long it will take to recover from even a short strike.

“A one-day shutdown takes three to five days to recover from,” he said. “The longer it goes on, the worse it gets.”

He said the last major port labor dispute, an 11-day lockout of union workers at West Coast ports in 2002, resulted in it taking six months for things to return to normal.

But most of these Christmas items can sit in warehouses or even shipping containers for months. This is not the case for perishable goods that flow through the ports, such as fruit and vegetables. And perhaps the best example of this is Americans’ favorite fruit, the banana.

Virtually all bananas consumed in the United States are imported, and 1.2 million tons of bananas flow through the ports represented by the ILA, with Port Wilmington in Delaware declaring itself the largest banana port in America. According to the American Farm Bureau, banana imports through these ports account for 25% of U.S. banana consumption.

But there are also many other imports, including 90% of imported cherries that travel through these ports, as well as a significant proportion of berries and other fruits. While there are domestic sources for these products, such as cherries from Michigan and West Coast states, demand for the product is greater than U.S. growers can provide.

And specialty foods like imported chocolate and meat from Europe are also at risk of quickly becoming scarce, said Danny Munch, an economist at the American Farm Bureau.

Consumers who “like items from abroad would be affected,” he said. “At the very least, it will be more expensive to purchase these items.”

And raw materials used by U.S. food producers, such as cocoa and sugar, also pass through the ports and are at risk of being hit.

The ingredients for Halloween chocolate have already arrived, Munch said, and production for Christmas may not be affected. However, depending on the length of the strike, production for early next year could be affected, making it harder to find Valentine’s Day candy.

If Americans want a drink, there are plenty of sources domestically. But many prefer imports from Europe, South America or the Caribbean, products such as German beer, French wine, Scottish and Irish whiskey or rum and tequila.

There is enough demand for these products that beverages and spirits are among the most important products handled at the Port of New York and New Jersey, the largest port that could be closed by this strike and the third largest in the country.

“This potential strike comes at the worst possible time,” Chris Swonger, CEO of the Distilled Spirits Council, told CNN. “We are geared towards the time of year when spirits are sold, which leads to the holidays. Even a one-day strike could have a significant impact.”

While Swonger said his members were also making efforts to expedite deliveries before Tuesday’s strike deadline, he said they would not be able to get everything they needed by the end of the year.

“Depending on inventory, you could see an impact in the liquor store within a month,” he said.

Additionally, 18% of the beer consumed in the United States is imported, as are 25 to 33% of the wine and 90% of the rum. And many of those imports come through ports on the East and Gulf Coasts.

The good news is that new vehicle supply in the U.S. is back to near pre-pandemic levels and up significantly from historic lows in 2022, according to Cox Automotive, with most European brands’ inventories above the industry average.

“In the short term, consumers and retailers would feel little impact from an ILA strike,” said Erin Keating, executive analyst at Cox.

But even good inventory is only worth two to three months, with hotter vehicles having a shorter supply. A long-term strike could devour this stock.

European automakers said they cannot currently say how badly they will be affected.

“It is very difficult for us to predict the impact,” Volkswagen spokesman Mark Gillies told CNN. “Ultimately, the strike, even if it only lasts a day or two, will secure the situation.”

The low inventory of new cars several years ago and the record price increases that accompanied this tight supply were due to a shortage of parts needed to make these cars. The bad news is that the strike could bring some of these production issues back into play, as shipments of auto parts from Europe and even Asia could be halted. Even if an automaker receives relatively few of the parts it needs through these ports, it cannot complete a car using only 99% of its parts.

“Plants across the Midwest are likely to experience ripple effects depending on their manufacturing strategies, whether they rely on just-in-time delivery or maintaining inventory levels,” said Chris Frey, senior manager of business intelligence at Cox. “Automotive manufacturing relies largely on an extensive, carefully coordinated supply chain. When this complex chain becomes stuck together, the ripple effect can be immediate and painful.”