Potential Strike at US Ports: Impact on the Economy Consumers and Opportunities for Mexico

#### What's happening in the USA supply chain? On October 1, 2024, about 45,000 port workers from the East Coast and Gulf of Mexico could begin a strike that would paralyze 36 key ports in the United States. This situation threatens to interrupt the flow of goods essential to the American economy and could generate price increases, delivery delays, and shortages in critical sectors. However, this strike also represents a unique opportunity for Mexico, which could take advantage of the paralysis of US ports to redirect trade through its own ports and strengthen its role in the global supply chain. ##### Origin of the Labor Conflict The labor conflict is due to workers' demands, who seek wage increases and the prohibition of automation in key port tasks such as crane and container handling. Negotiations between the International Longshoremen's Association (ILA) and the United States Maritime Alliance have been deadlocked since June, and if no agreement is reached before October 1, workers will declare a strike, the first since 1977. ##### Affected Ports in the United States The ports that would be affected by the strike include some of the most important in the country, such as: * Baltimore and Brunswick (Georgia): Specialized in vehicle transportation. * Philadelphia: Prioritizes the handling of fruits and vegetables. * New Orleans: Mainly moves coffee, chemicals, and wood derivatives. Other key ports that would be paralyzed include New York and New Jersey, Savannah, Charleston, and Houston. A prolonged paralysis would seriously affect goods distribution in the US, with a direct impact on the economy and consumers. ##### Impact on Consumers and Companies in the US If the strike extends for weeks, consumers could face product shortages, especially in sectors such as fresh foods, automobiles, and toys, just before the Christmas season. Although many companies have anticipated the strike and advanced their orders, a prolonged paralysis would affect stores' ability to maintain inventories, which could translate into higher prices and fewer options for consumers. The automotive industry would be one of the most affected, as many of the ports on strike handle vehicle imports. Likewise, the toy industry, which makes more than 60% of its annual sales in the fourth quarter, could face significant delays in the arrival of key products for the Christmas sales season. ##### Mexico: An Opportunity in the Midst of Chaos While the US deals with the possible effects of the port strike, Mexico could take advantage of the situation to redirect part of international trade through its own ports. Facilities such as the ports of Manzanillo, Lázaro Cárdenas, and Veracruz could become viable options for companies that need alternative routes for their products. Geographic proximity, port infrastructure, and solid land and rail connections between Mexico and the US are advantages that Mexican logistics companies can leverage. This would allow Mexico to become a strategic transit point for goods that would normally enter the United States through the now affected ports. ##### Opportunities for the Logistics Sector in Mexico Logistics companies in Mexico, such as Control Terrestre, are well positioned to take advantage of this opportunity. Specialized in FTL (Full Truck Load) cargo, Control Terrestre offers fast and efficient solutions to transport large volumes of goods between Mexico and the United States. At a time when maritime routes are at risk of paralysis, land solutions like those offered by Control Terrestre become even more valuable. The focus on full loads (FTL) allows optimizing delivery times and maximizing cargo security, a key factor when delays can have a significant impact on costs and product availability. Additionally, Mexico has a land infrastructure that facilitates transportation to the US border, offering companies a reliable alternative to the strike. ##### What should be taken into account? The potential strike that would begin on October 1 at US ports would have a significant impact on the economy and consumers, from product shortages to price increases. However, Mexico has a unique opportunity to take advantage of this crisis to increase its relevance in international trade. Mexican ports and logistics companies, such as Control Terrestre, can become key players by offering efficient alternatives to mitigate the effects of the paralysis in the United States and maintain the flow of goods between both countries.