Will a Port Strike Impact the Gas Industry? Insights from Experts and Federal Officials

Plenty of products may become hard to find amid the ongoing union dockworkers strike, but there is one crucial place that experts don’t anticipate consumers are likely to suffer: at the gas pump.

On Tuesday, 45,000 union workers walked off the job when negotiations for a new contract broke down, effectively shutting down 36 East and Gulf coast ports that, combined, handle about half of all U.S. ocean imports. The decision represented the International Longshoremen’s Association (ILA) first strike since 1977.

The work stoppage is expected to make it harder for shoppers to find products like bananas, electronics, auto parts, pharmaceuticals and even alcohol. But fortunately for Americans, the strike isn’t expected to disrupt the oil and gas industry – at least not right away.

Here’s what the federal government and other experts want consumers to know about their ability to gas up their vehicles amid the strike.

How port strike could affect shoppers:Alcohol, bananas and seafood among products that could be in short supply

Fuel prices, supplies, unlikely to take a hit from port strike

Because crude oil, gasoline, natural gas, and other liquid fuel exports and imports are handled by “other workers,” the Department of Energy put out a statement saying that the strike “will not have any immediate impact on fuel supplies or prices.”

The department added that it is working with the White House and other government agencies to “continue partnering with oil and gas companies, as well as electricity generators and utilities, to monitor operations and supply chains.”

“We encourage all parties to come to the bargaining table and negotiate in good faith – fairly and quickly,” the agency said.

Prolonged strike could impact gas industry, experts say

Experts who spoke to USA TODAY on Wednesday tended to agree under one caveat: that the strike doesn’t become prolonged.

Ernie Miller, CEO of Verde Clean Fuels, said fears of a massive spike in oil prices from either the strike or a wider war in the Middle East following Iran’s missile strike on Israel may be exaggerated. The United States has something of a “buffer” thanks to an increase in domestic oil production in the last decade, he said.

“We’re in a very different production scenario now versus years ago when we were a net importer,” Miller said.

While that domestic stockpile may protect from a shortage in the short term, a prolonged strike “could have consequences,” said Stephen Schwartz, Wells Fargo managing director of supply chain, trade and channel solutions.

“Oil and gas imports and exports are typically handled by different workers and go through terminals outside the scope of the current port strike, Schwartz said. “However, a protracted strike could have consequences for energy demand in certain sectors such as trucking, rail and bunker fuel used for cargo ships.”

What consumer products may be hard to find?

Because about half of all U.S. ocean imports flow through the ports, consumers may end up facing higher prices and shortages again, Chris Tang, distinguished professor at the University of California, Los Angeles who specializes in supply chain management, told USA TODAY.

Items that may experience shortages and higher prices include:

Seafood: Perishable products like cod from Iceland or Canada and shrimp from Thailand and Ecuador aren’t easily transported by train because they need to be refrigerated, Tang said.Electronics: Cell phones and computers, which now come from southeast Asian nations like Vietnam, Indonesia, and Thailand instead of China, are routed through East Coast ports, Tang said.Pharmaceuticals: Although these are easier to ship via air, consumers may still notice drug shortages if negotiations can’t be settled within about a month, Tang said.Cars and auto parts: European cars shipped via container and auto parts often pass through East Coast and Gulf Coast ports. In fact, the Port of Baltimore, Maryland, leads the nation in car shipments, according to experts.Machinery parts: The East Coast ports surpass others in the U.S. in shipments of machinery, fabricated steel and precision instruments, according to S&P Global Market Intelligence.Alcohol: Wine, beer and spirits imported from Europe, South America or the Caribbean may take a hit. Fortunately, American drinkers have plenty of domestic options.Bananas: About 75% of the nation’s bananas enter through East Coast and Gulf Coast ports, said Jason Miller, interim chair of Michigan State University’s department of supply chain management. Moreover, because the fruit is perishable, it’s not economical for them to be shipped on planes, Miller wrote in a LinkedIn post.

How else may consumers be affected by the strike?

The strike, which is projected to cost the economy up to $5 billion a day, may be keenly felt in consumers’ wallets if prices increase as a result, experts previously told USA TODAY.

Even if port workers agree to a deal, “labor costs go up,” Tang said. “So down the road, consumers still pay a higher price. Consumers will have to learn to adjust and adapt, but unfortunately, things will be more expensive.”

Americans may also soon struggle to complete their holiday shopping.

Because of the strike’s impending supply chain disruption, consumers may have a tough time finding the toys and other gifts for their children they are looking for in the weeks and months ahead.

While large corporations like Walmart and Costco can afford to take inventories early and store them – or absorb the cost of rerouting shipments to the West Coast – smaller businesses typically can’t, experts have said.