Georgia retailers, truckers and warehousemen are scrambling to avoid economic pain if longshoremen strike at the port of Savannah next week and shut down one of the state’s most critical economic engines.
Thousands of Georgia jobs and millions in revenue are at stake if the dock workers with the International Longshoremen’s Association walk away from their posts along the Savannah River at midnight December 29.
Negotiations between the union, which represents longshoremen at 15 East and Gulf coast ports, and an alliance of shipping companies and terminal operators broke down earlier this week. No new talks were planned as of Friday.
Curtis Foltz, who runs the ports of Savannah and Brunswick, said business is already off 5 percent since September when shippers began re-routing cargo in anticipation of a possible strike. He fears a work stoppage would register a “huge impact” on Georgia’s economy.
The effect on consumers remains unknown, though goods shipped from western ports to the East via road or rail could carry a strike surcharge.
Georgia's public and private ports account for nearly $40 billion in statewide economic impact and support more than 150,000 related jobs, according to a University of Georgia study. Metro Atlanta, a major distribution hub, reaps roughly 70 percent of the ports' economic benefit.
Foltz, executive director of the Georgia Ports Authority, which is not a member of the shipping alliance, said Friday that up to 80 percent of the Savannah port’s business will cease once the strike commences.
“That means no trains arrive or depart, no containers are dispatched and no ships work,” he said. “It would be devastating to jobs whether you’re exporting forest products, kaolin clay, poultry or carpets. It’ll be very costly (for) lost market opportunities.”
Nearly 15,000 longshoremen at ports from Boston to Houston seek a six-year contract extension in talks with the U.S. Maritime Alliance, which represents shipping lines and ports. Management’s proposal to cap “container royalty” payments — a hefty portion of a dock worker’s annual pay and health care costs — remains the major issue.
If the longshoremen — container handlers, truck drivers, gate operators and others — walk out, container traffic would halt. Other cargo, including car imports and exports and the shipment of military goods, wouldn’t be effected.
Roughly 1,500 union jobs are in jeopardy at Savannah, the nation's fourth busiest container port. The Authority's 700 non-union employees, though, will remain on the payroll if the strike happens, Foltz said. Brunswick doesn't handle containers and won't likely be impacted.
It’s impossible to gauge the financial pain of an East and Gulf coasts strike. A 2002 walkout on the West Coast cost an estimated $1 billion a day, according to the National Retail Federation. Savannah, though, benefited mightily from the strike as retailers and manufacturers shifted imports closer to East Coast customers.
The retail trade group sent a letter to the White House this week claiming that the impending work stoppage “could prove devastating for the U.S. economy.”
A strike would cascade pain across Georgia. Roughly 3,000 trucks enter and leave the port of Savannah daily. They ferry the steel-box containers to warehouse and distribution centers across the state.
Truckers and other port-related workers are scrambling to adjust to a potental strike.
“We’re preparing for an inordinate amount of need for equipment going West,” said Jim Syfan who owns Syfan Logistics in Gainesville which trucks poultry and other food stuffs to warehouses near Savannah, Charleston and other East Coast ports. He’s lining up as many as 4,000 trucks for runs to the ports of Los Angeles or Long Beach.
“We just don’t sit twiddling our thumbs. We’re trying to get ahead of the curve,” Syfan added.
Atlanta home improvement giant Home Depot has “contingencies in place for any possible disruption of ports,” a spokesman said Friday without elaborating. Home Depot uses a “four-corners” ports strategy: Asia-made imports come ashore in California, Washington, New York and Savannah and then get distributed around the country.
CSX and Norfolk Southern, which run trains daily into Savannah, are also readying alternatives.
“We are hopeful the situation will be resolved before the contract extension expires,” CSX spokesman Gary Sease said.
The retail association and others have asked President Obama to join the negotiations, a prospect so far avoided by the White House. Retailers and shippers have also requested that Obama invoke the Taft-Hartley act to prohibit a strike, keep the ports open and avoid damage to a still-fragile economy.
A post-holiday walkout, though, may not be as bad as feared since retailers’ busiest season will be over.
