Bananas, imported wine and beer, coffee and auto parts — there’s a list of things consumers can expect to find in the Carolinas in the coming weeks. Dock worker strikes on the heels of devastating hurricanes are the main reason, but shopping habits may be another.
“This is very unusual,” said Robert Handfield, a professor and supply chain expert at North Carolina State University. “Severe storms hitting interstate highways combined with harbor strikes have never happened before.”
Hurricane Helene tore through the Carolinas last week, cutting power to the western part of both states.
Western North Carolina faced severe flooding and widespread damage. Many people in the Carolinas are still without power. The storm damaged major freight routes Interstate 40 and Interstate 26 near the border of North Carolina and Tennessee.
Currently, dock workers in the eastern part of the country are on strike. The labor dispute will disrupt supply chains that rely on facilities in Wilmington, Morehead City and Charleston to supply goods to the region.
Grocery store supply chain impact
Mark Ferguson is an associate dean at the University of South Carolina’s Darla Moore School of Business. Grocery stores in the Carolinas that lost power and had to throw away fresh items will result in higher prices and harder-to-find items “probably for a couple of days,” he said Wednesday afternoon.
“In short, most of us will see fresh vegetables, fruits, anything imported from South America. To a lesser extent, Europe.”
Ferguson was not aware of the power loss at the cold storage facility, where food stocks are kept before going to the supermarket. But when they and grocery stores have to restock, it can be difficult to get items from the West Coast.
“The attack will create itself. But it will be amplified by the hurricane because the existing supplies are depleted,” said Ferguson. “It’s going to be up and down the East Coast from port closures, but especially the Carolinas, Florida, Georgia.”
A port attack could result in anything from larger European car parts used in South Carolina BMW or Volvo factories to French or Italian wine, beer or German cheese. Large appliances like washing machines or heavy machines from Europe can be difficult to obtain.
The attack could also affect the results of the West Coast. How long consumers see the impact will depend on the attack.
“This is going to be a problem until the port reopens,” Ferguson said. “There is no economical way to get fresh food to the East Coast, other than the port.”
Companies that trade in non-perishables, especially large retailers, have pre-ordered supplies before the strike to have a month or more supply.
“I don’t see the need to panic buy things like electronics, toys, Christmas presents,” Ferguson said. “These big retailers are anticipating the attack.”
Prices are likely to rise in construction materials, due to the availability of the port and the great need on the Helene road, he said.
“There’s going to be a lot of rebuilding,” Ferguson said.
If the strike lasts longer than the month provided by the company, then consumers will feel the impact more sharply, he said.
Panic buying can affect product availability
As retailers begin preparing for a summer dockworker strike, the impact on customers should be minimal during the first few weeks, said University of South Carolina research economist Joey Von Nessen. That’s if – and it’s a big if – consumers follow their normal buying patterns.
For communities that remember how quickly toilet paper flies off the shelves during the COVID pandemic, or trying to buy milk and bread on a snowy day, there is always the threat of panic buying.
“Anticipated shortages can sometimes lead to current shortages,” Von Nessen said. “That makes a self-fulfilling prophecy.”
Both sides of the labor strike have an incentive to resolve quickly, he said, because they are both consumers themselves and understand how important the work is to the region’s infrastructure. The Port of Charleston accounts for one out of every nine jobs in South Carolina and has an annual economic impact of $87 billion, Von Nessen said.
It’s not like bananas can be damaged if they have to take a longer and more expensive route through the West Coast because of the strike, South Carolina’s main export or vehicle, tires and agricultural products. “Everything is indestructible,” Von Nessen said.
But if the strike extends beyond two weeks, prices will rise and product shortages may increase, he said. This is an unusual time for forecasting, with variables ranging from labor negotiations to markets and roads being thrown by hurricanes and not being able to receive goods.
“It’s really unusual to have two events like this at the same time,” Von Nessen said. “It only increases the challenge. The important thing is to remember not to panic.”
Interstate losses to cause regional concern
Even without a labor strike, Carolina would have faced logistical problems.
“I-40 and 26 are the highways for a lot of stuff for the east coast,” Handfield said. “So it has affected different parts of the country, which may affect different categories. One of the biggest concerns is the health supply for the hospital on Helene street, which usually does not have a lot of supplies.
It may be months before the logistics channel improves.
“We have to think about the infrastructure — cell phone towers, roads, power lines and many other elements,” Handfield said. “This is going to take months to fix and get this community working again.”
Price gouging in retail stores
Too many retailers to name have donated millions of dollars of inventory to places ravaged by Helene, said Andy Ellen, president and general counsel for the 2,500-member North Carolina Retail Merchants Association. But there is still a cost to all the trucking and labor being diverted.
“These are some of the items that will be moved from the distribution center to the stores that were not affected by the hurricane,” Ellen said.
They don’t anticipate short-term problems getting water, cleaning supplies or plywood to rebuild from the storm. But he sees potential problems with dockworker attacks. About 40% of what’s on store shelves in the country passes through the port, Ellen said.
Although the strike ended quickly, but the workers got the 50% wage increase they wanted, he said, the market could feel it. “This will also have the potential to impact prices,” Ellen said.
Consumers should expect some price increases, including for staples like coffee, Ellen said. Customers can also help or hurt supply based on how they buy.
“Regardless of the hurricane and regardless of this attack, this is not the time for consumers to panic,” Ellen said. “We’ve been there before.”
Avian flu has affected egg prices in the past, and the war in Ukraine has affected wheat. Items that are affected by COVID throughout the supply chain. As prices rise and people buy what they can find, for themselves or to donate, some people may mistakenly equate supply and demand with prices, Ellen said.
“That doesn’t mean the retailer did anything wrong,” he said.
Ellen hopes things improve during the holiday shopping season. He is also concerned that the country is still recovering from high prices due to inflation.
The length of the port strike will determine whether it is a blip or closer to the supply chain challenges of the COVID era.
“We may see some of that in the future,” Ellen said. “If this strike is prolonged, we will see higher prices on store shelves.”
