International Longshoremen Association Strike's Impact on the Premium Tobacco Industry
Could the International Longshoremen Association Strike affect the premium cigar industry?
Yes. The true effects largely depend on how long the strike will last.
What will disruption mean for trade?
The supply chain on the East and Gulf coasts will be disrupted, potentially slowing down the shipments of cargo and consumer goods typically loaded on vessels transported by sea.
What ports does this affect?
There are 36 ports in total, including Miami, Tampa, and Fort Lauderdale, which are key hubs for the inbound shipment of premium cigars to the United States.
What happens to the shipments being sent to the United States?
During the strike, shipments are either rerouted to different ports or withheld. Sea-based shipments could be adjusted to come by air or land routes.
When did the strike start?
October 1, 2024.
How could this be resolved?
Management and labor could reach a new agreement, or President Biden could invoke the Taft-Hartley Act to require an 80-day “cooling off” period focused on mediation between them.
Why is this problematic?
This could cause global disruption in the supply chain, lead to an increase in shipping prices, and disrupt the shipment of goods in time for the holiday rush of consumer retail spending.
What experts are saying?
“The overwhelming tonnage of cargo imported into the United States arrives by ocean. The ILA strike affects all union ports along the East and Gulf Coasts. All types of products, such as bananas from Costa Rica and TVs from China, will be affected, including cigars, which are typically imported into the United States by ocean from the Dominican Republic or one of the countries in Central America. Producers and importers of cigars need to urgently plan accordingly,” says Peter Quinter, Chair, U.S. Customs and International Trade Law Group and Gunster law firm, Miami, Florida.
“Nearly every consumer or retail goods provider in the United States has a vested interest in seeing this situation resolved quickly. This includes retailers, importers, and manufacturers of premium cigars. Even though your particular shipment may not be affected by the strike, the overall disruption to the system could have secondary and tertiary effects on the U.S. supply chain,” says Joshua Habursky, Executive Director of the Premium Cigar Association.
