As port workers on the East Coast and Gulf Coasts went on strike early Tuesday, aftermarket car audio companies were left scrambling to adjust their shipments and inventory planning.
The strike is halting container traffic from Maine to Texas. It involves 45,000 members of the International Longshoremen’s Association union and could cost the US economy $500 million a day.
Many suppliers said they already had boats on the water and were trying to redirect planned shipments to the West Coast ports. However, a work stoppage in the East will likely cause a bottle neck in West Coast ports, they said.
Port workers unload containers, sort them and load them into trucks. A stoppage means that container ships will be forced to sit in deep waters off the coast and incur a per container charge for the extra time on the water.
Overall, the strike is expected to stop the flow of goods from food to automobiles and automotive parts, said news reports. The reports said a strike of a week or longer could greatly disrupt the economy.
More than one 12 volt supplier and distributor said a prolonged strike could be devastating to business.
One distributor said, “Yes, we can only assume it will be disruptive, especially with the holidays upcoming.”
Aron Demers, Senior VP VOXX Electronics said, yesterday, prior to the official walk out, “Our biggest concerns is incoming vehicle shipments to the East Coast. We have shipping facilities on both sides of the country but the other concern is the congestion on the West Coast and what impact that will have on current shipments that are on the water.”
A leading car audio supplier said the strike will disrupt OEM business as many cars and car parts use East Coast ports. This will cause a slow down in factory orders, followed by a scramble when the ports reopen so that car audio companies will have to work triple time to catch up.
A small aftermarket supplier on the East Coast said, “I only have two shipments on the water right now that will be affected, but I need to put two more on the water so I’m reluctant.” He said of the ships left waiting at sea, “They are penalized up to $100,000 a day. Divide that by the number of containers on a ship and now there are extra chargers to the importer.”
He added of a prolonged strike, “I will run into backorder and the ships coming in were supposed to get me out of backorder on two models.”
When a ship is idled at sea, the crew still must be paid and there are insurance costs and sometime fuel charges, according to a query to ChatGPT. It confirmed the daily container ship charge could be $20,000 to $100,000 but noted that a ship can contain 5,000 to 24,000 20-foot containers.
Thank you for this Amy! I have been trying to find out if this would effect our industry.