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- Longshoremen went on strike Tuesday, shutting down ports on the East and Gulf coasts.
- A prolonged strike would most heavily affect automakers importing vehicles from Europe.
- Car companies have plenty of inventory, enough to cover 77 selling days.
Dock workers across the East and Gulf coasts of the US went on strike Tuesday morning.
The effects of a prolonged work stoppage would likely be felt throughout the US economy, including the automotive industry, which depends on ports in cities like New York, Baltimore, and Savannah, Georgia, to handle millions of vehicles arriving from abroad.
Fortunately for US consumers, there is a glut of inventory at dealerships across the country, so the immediate impacts of the strike will likely be limited.
The latest September data provided by Cox Automotive shows that more than 2.84 million new cars are on sale. If no new inventory arrives, car companies have, on average, a 77-day supply of vehicles to sell. That's well above last year's levels and higher than the 65-day level industry experts agree to be the healthiest.
European carmakers such as BMW, Mercedes-Benz, Volkswagen, and Volvo are expected to be most heavily affected, Reuters reported, citing research by Barclays analysts.
But most of these automakers have significantly more than the national average of 77 days of inventory.
Martin Meissner/AP
According to Cox, BMW has 88 days, Mercedes has 100 days, and Volvo has a 142-day supply.
As for VW, the Volkswagen brand has a healthy 66-day supply, while its Audi luxury division has an 86-day supply.
The Port of Baltimore led the nation's ports in vehicle processing last year, handling more than 847,000 cars and light trucks. BMW, Mercedes-Benz, Volvo, and Volkswagen all operate vehicle-processing and -distribution facilities at the port.
While West Coast ports, which aren't affected by the strike, handle the bulk of traffic coming from Asia, automakers like Toyota and Hyundai also use East Coast ports.
Toyota, which brings vehicles for its southern dealerships ashore in Jacksonville, Florida, doesn't have the benefit of a hearty inventory to rely upon. Both the main Toyota brand and its Lexus luxury division have less than half the national average, with 35 and 30 days' worth of inventory, respectively.
A Toyota spokesperson told Business Insider in a statement that the company was "monitoring the situation closely and developing countermeasures to minimize any impact" on its customers and dealers.
Stephen B. Morton/Georgia Port Authority
Other key ports include Savannah and Brunswick in Georgia, which combined processed 830,000 vehicles last year from brands like Mercedes-Benz, Hyundai, and Kia. At the same time, the Port of Jacksonville handled just over half a million vehicles from Toyota and Volkswagen in 2023.
More than 45,000 dock workers represented by the International Longshoremen's Association walked off the job on Tuesday after failing to reach a new work agreement with the US Maritime Alliance, a consortium of maritime employers.
The ILA's demands include a 77% increase in pay over the lifetime of the six-year agreement and limits on automation at the ports, The Associated Press reported.
The USMX has countered by offering to increase wages by nearly 50% and retain the current policy on automation.