Lowe's, Home Depot in Strike Spotlight

cargo ship
cargo ship

Negotiations have failed between the International Longshoremen's Association and the U.S. Maritime Alliance, raising the threat of a longshoreman's strike against U.S. ports on East and Gulf Coasts. The Alliance represents container ship carriers, and a strike against the carriers jeopardizes shipments of goods to retailers in a variety of sectors.

One of the hardest hit could be the home improvement stores, including Lowe's Companies (NYSE: LOW) and The Home Depot Inc. (NYSE: HD), both of which depend on sales in the first half of the year as consumers prepare for the coming spring and summer. The union contract expires on December 29, and although a new round of mediated negotiations is taking place, a strike appears certain.

Clothing retailers also could be hurt by a strike as they begin to stuff their shelves with spring merchandise in February. Bloomberg reports that many retailers have shifted suppliers from China to South America, which could worsen the effect of the strike because most South American goods enter the United States through East Coast ports.

Target Corp. (NYSE: TGT) and Wal-Mart Stores Inc. (NYSE: WMT) would also be affected because cargo would neither be taken off ships nor moved out of port warehouses.

A strike at West Coast ports lasted for eight days last month and was concluded without intervention by President Obama, who has been encouraged by the National Retail Federation to invoke the Taft-Hartley Act to prevent a strike at the East and Gulf Coast ports.

Paul Ausick

Filed under: 24/7 Wall St. Wire, Consumer Goods, Housing, Labor & Unions Tagged: HD, LOW, TGT, WMT