Potential USA Port Strike Alert October 2024
How Amazon Sellers Can Prepare for the Disruption:
As Amazon sellers, we know that timing and supply chain efficiency are crucial to our success.
Any disruption in the flow of goods, particularly during peak sales periods, can result in significant delays, financial losses, and customer dissatisfaction.
Unfortunately, we are now on the verge of such a disruption, as a potential strike looms over 36 major U.S. ports located along the East Coast and the Gulf of Mexico.
This potential strike is more than just an isolated labor dispute; it could have massive ramifications across industries, including e-commerce.
The date to watch is October 1st, 2024. If negotiations between dockworkers and port authorities don’t reach a settlement by then, the strike will commence, severely impacting the flow of goods into and out of the United States.
In this article, we’ll break down everything you need to know about the strike, the reasons behind it, and how Amazon sellers like you can stay ahead of the curve to mitigate risks.
The Stakes: What’s Behind the Strike?
The situation is dire. Dockworkers, represented by their unions, are seeking a significant wage increase—77% over the next six years—along with other critical demands, including protections against automation, which threatens job security for many workers in the sector.
Currently, dockworkers earn a base pay of $39 per hour, or about $81,000 annually, but they argue that this salary has not kept up with inflation and the rising cost of living.
Moreover, automation remains a sore point.
With advancements in technology, port authorities and companies that own these ports are seeking to automate many labor-intensive tasks, potentially leading to job losses. The union is standing firm on ensuring that their members’ jobs remain secure in the face of automation, which they see as an existential threat.
If a deal isn’t reached, the strike could cost the U.S. economy $3.7 billion per day.
Moreover, this isn’t just a problem for domestic industries. The strike will impact 49% of all U.S. imports, affecting goods that range from raw materials to consumer products—including those you sell on Amazon.
How Will This Strike Impact Amazon Sellers?
The potential disruption to the global supply chain could have disastrous effects for sellers on Amazon. Let’s break down the key areas where Amazon sellers are likely to feel the impact:
1. Inventory Delays
The most immediate concern for Amazon sellers is the impact on inventory flow. Ports along the East Coast and Gulf of Mexico are major entry points for goods coming into the U.S.
If dockworkers go on strike, the unloading of cargo will be delayed indefinitely. Goods in transit will likely remain stuck on ships for an extended period, leading to shortages, particularly for products that rely on just-in-time inventory management.
For sellers whose goods are already in transit, the only hope is that the strike is short-lived.
However, there are no guarantees, and any delay could result in lost sales opportunities, especially as we enter the critical holiday shopping season.
2. Price Volatility
Another side effect of the strike could be increased prices for goods. With fewer products making it to market, supply will fall short of demand.
This scarcity could drive up prices, not only for consumers but also for Amazon sellers who rely on suppliers for replenishment. Whether you source products from international or domestic suppliers, prepare for the possibility of price fluctuations in your supply chain.
3. Shipping Costs and Routes
Even if you manage to find alternative ways to get products into the U.S., expect shipping costs to rise.
As demand for West Coast ports and other logistical solutions increase, so will the associated costs.
Moreover, rerouting shipments to ports outside of the East Coast or Gulf regions may introduce longer transit times and additional logistics hurdles. Sellers will need to factor in both time and cost when determining how to navigate these challenges.
Steps Amazon Sellers Should Take Now
To avoid disruption or at least mitigate the impact of this potential strike, sellers need to act quickly. Here are steps you can take to prepare:
1. Monitor the Situation Closely
Stay informed about developments in the negotiations. As we approach October 1st, it’s essential to stay up to date on whether the strike will move forward or be averted. Use reliable news sources, updates from Amazon seller forums, and reach out to Proboxx HERE to get the latest information.
2. Reroute Shipments to West Coast Ports
If you’re planning to ship inventory soon, it’s wise to consider rerouting to West Coast ports, which are not currently facing strike threats.
Although this might result in higher shipping fees, it’s better to ensure that your products make it into the country on time than to risk being caught up in a long-term labor strike.
Work closely with your suppliers and freight forwarders to ensure that your goods can be routed effectively.
3. Adjust Your Inventory Strategy
For sellers whose products are already en route to East Coast ports, there’s not much you can do at this point but wait.
However, for sellers still in the planning phase, consider diversifying your supply chain and sending inventory to Fulfillment by Amazon (FBA) warehouses located on the West Coast.
Having your products distributed across multiple regions can protect you from future disruptions.
4. Consider Local Suppliers
Now might also be a good time to explore sourcing products from local or domestic suppliers. While U.S.-based manufacturing may have higher costs, it could be a more reliable option in the short term until the situation stabilizes. This strategy could ensure you have inventory available for sale even if international supply chains are disrupted.
5. Communicate With Customers
Transparency is key during periods of uncertainty. If delays become inevitable, communicate clearly with your customers. Update product listings to reflect longer shipping times if necessary, and consider offering promotions or incentives to keep customers engaged, even if their orders are delayed.
6. Evaluate Stock Levels and Replenishment Plans
Take stock of your current inventory and future replenishment needs. Make sure you have adequate stock to handle any potential disruptions, especially if you're already selling high-demand items. If necessary, consider ordering additional inventory now and expediting shipments to get them into FBA warehouses before the strike date.
Reach out to us HERE so we can help you create a strategy for your shipments.
What Is the Government’s Role?
One of the more contentious points in this potential strike is the federal government's stance.
Historically, presidents have used national law to intervene in strikes that could have a significant impact on the U.S. economy.
However, President Biden has already indicated that he will not intervene to stop the strike from happening.
This decision has caused concern among many businesses and industries that rely on the smooth operation of ports.
Without government intervention, the likelihood of a prolonged strike increases, meaning sellers need to be prepared for the worst.
Navigating the Uncertainty
The potential port strike along the U.S. East Coast and Gulf of Mexico is a significant event for Amazon sellers to keep on their radar. Disruptions to inventory flow, rising shipping costs, and delayed goods could severely affect your business during a critical time of year.
The best course of action is to stay informed, act preemptively, and explore contingency plans such as rerouting shipments to other ports or adjusting inventory management strategies.
By being proactive, you can minimize the potential damage and keep your business running smoothly even in the face of a significant supply chain disruption.
For more personalized advice or assistance with your upcoming shipments, feel free to contact us HERE to help you navigate these challenges.