10/3/2024 UPDATE: The International Longshoremen’s Association (ILA) and the United States Maritime Alliance, Ltd. (USMX) have reached a tentative agreement on wages and have agreed to extend the Master Contract until January 15, 2025 to return to the bargaining table to negotiate all other outstanding issues.

CALIFORNIA – Major retailers Costco and Walmart said they are prepared for potential shortages due to the International Longshoremen’s Association (ILA) strike that could impact food deliveries.

Almost 50,000 ILA members went on strike, October 1, demanding a $5 per hour increase in wages for each year of the six-year agreement.

They are also calling for no automation or semi-automation of cranes, gates and moving containers in the loading and unloading of freight.

According to Supply Chain Dive, at least 12 ports on the East Coast faced significant disruptions due to the strike, though not all terminals have been completely shut down, suggesting varying levels of impact across locations.

Inland Empire may step in the fill the gap

California Retailers Association president Rachel Michelin said many of her member retailers have made contingency plans to reroute shipments to the West Coast.

“We’re going to see a backup here in California because we’re going to have to absorb more cargo,” said Michelin.

As a growing number of warehouses in the Inland Empire sit empty, space may be available to store the increased inventory.

Costco has contingency plans

Meanwhile during a September earnings call, Costco said they’ve got contingency plans in place to manage potential supply chain disruptions.

“…we’ve cleared the ports, we’ve preshipped. 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,” said Costco President and Chief Executive Officer Ron Vachris.

Vachris says freight rates could go up due to a port disruption. These costs are typically passed on to consumers. 

Walmart has also planned for disruptions.

“We prepare for unforeseen disruptions in our supply chain and maintain additional sources of supply to ensure we have key products available for our customers when and how they want them,” Walmart said in an emailed statement to Supermarket News.

Items that may be in short supply

Items that may be impacted by the strike include:

• Fresh fruits and vegetables coming from Central and South America
• Juices
• Beer, wine and liquor
• Toys
• Tires and other car parts
• Furniture
• Salt
• Sugar

The ILA intends for the strike demonstrations to continue round the clock, 24/7, for as long as it takes for the United States Maritime Alliance (USMX) to meet the demands of ILA rank-and-file members.