As the International Longshoremen’s Association went on strike this morning over a new master contract, construction pros across the country are waiting to see how the walkout, which affects ports from Texas to Maine, will impact their businesses.
The ILA’s talks with the United States Maritime Alliance broke down over wages and a total ban on the automation of machinery important to dockwork, including cranes, gates and container-moving trucks, according to the Associated Press. The strike is the first by the union since 1977, the outlet reported on Tuesday.
The impacted ports are some of the main points of entry for construction materials, heavy machinery, food, vehicles and chemicals, according to The Wall Street Journal. Material delivery delays could also occur in other regions of the country, according to Manufacturing Dive.
Exports of oil and liquefied natural gas at Gulf Coast ports will likely be unaffected because the ILA has little or no involvement in those operations, The Wall Street Journal said.
Bill Flemming, senior vice president at New York City-based consulting firm Cumming Group, said that impacts of the strike would be felt immediately in the construction industry. If the strike goes on for more than a week, it could cause delays of weeks, if not months, because ships will back up, and distribution to warehouses and construction sites will be delayed.
Flemming added that many structural steel products, a host of finish materials and furniture, fixtures and equipment will be affected.
Depending on how long the strike lasts, contractors may run into issues with specific items, according to Ken Simonson, chief economist for the Associated General Contractors of America.
“Quite likely, there are certain materials, parts, or equipment that will turn out to be in short supply if there is a strike that lasts more than a few days,” Simonson said.
For example, procurement leaders at Providence, Rhode Island-based construction giant Gilbane expect that a one-week strike would create a backlog that would take four to six weeks to clear, while a two-week strike would extend the recovery period into 2025, according to Jay Pendergrass, the firm’s vice president and director of supply chain management and equipment.
“A strike may significantly delay delivery dates and increase prices for equipment, materials and supplies,” Pendergrass wrote in a Sept. 16 supply chain update.
Hurricane-induced shortages
Compounding potential supply chain problems is the devastation caused by Hurricane Helene, which left a 500-mile trail of destruction as it tore through the Southeast from Florida’s Big Bend region last week and reached as far inland as the mountainous regions of North Carolina. The storm devastated communities with torrential flooding and downpours and killed at least 102 people, according to CNN.
Simonson said the damage caused by the hurricane may add to demand for items for repair or replacement that would normally arrive through East and Gulf Coast ports.
“The prospect of further storms disrupting Atlantic or Gulf of Mexico shipping, ports, or their hinterlands means a strike could have a quicker and more widespread impact than in ‘normal’ times,” Simonson wrote.
Despite questions around the near-term supply chain outlook, Simonson said that materials issues have been minor in recent months, apart from extreme lead times for many types of transformers and switchgears.
Pendergrass wrote that contractors and supply chain professionals can take steps to mitigate the impacts of the strike. They include:
- Increasing inventories for critical materials and spares.
- Designing alternative route scenarios with project suppliers and contractors.
- Considering air freight as an option for the most critical materials, where appropriate.
- Exploring alternative nearshore manufacturers for currently sourced materials.
Even with preparation, the outlook is far from ideal for builders.
“The strike will dramatically slow the shipping of goods and materials used in all commercial building,” Flemming said.
