US retailer Costco Wholesale is taking a wide variety of steps to prepare for possible strikes next week at US ports on the East Coast and Gulf of Mexico, the company’s chief executive said on Sept 26.
Contingency plans in place include pre-shipping some products to get in holiday goods early and preparing to use different ports, Costco’s CEO Ron Vachris said on the company’s fourth-quarter earnings call.
Companies that rely on ocean shipping are increasingly worried the International Longshoremen’s Association’s 45,000 members will strike on Oct 1 and close 36 ports that handle more than half of US ocean trade of products such as bananas, meat, prescription drugs, auto parts, construction materials and apparel.
If that happens, delays and costs could quickly cascade, threatening the US economy in the weeks ahead of the country’s presidential election, burdening already taxed global ocean shipping networks and foisting higher prices on consumers over time.
“We’ve cleared the ports, we’ve pre-shipped. We’ve done several different things that we could to get holiday goods in ahead of this time frame, and looked at alternate plans that we could execute with moving goods to different ports and coming across the country if needed,” Mr Vachris said.
Asked about bringing in goods early, he said, “We have done a little bit of everything you spoke about,” and added, “It could be disruptive, but how impactful, I can’t tell you… until we know what could happen out there.”
A prolonged strike could result in shortages of familiar items such as bananas, coffee and cocoa, which could translate to higher grocery prices over time.
It could also mean lost export sales of key agricultural products including beef, pork, chicken and eggs. REUTERS