Skip to Content
Author's profile photo Richard Howells

The domino effect of port closures on the west coast

Ports along the West Coast will be closed for four days over the Presidents Day weekend due to a labor standoff, and this will have a significant impact on business not only in the US but across the world. As the chaos theory goes, “When a butterfly flaps its wings in one part of the world, it can cause a hurricane in another part of the world.” This famous saying describes today’s complex networked economy where trading relationships are global and interlinked. If the West Coast Ports are closed:

  • Retailors who rely on surviving on low inventories and imports from foreign manufactories could run out of  inventory
  • Manufacturers will not get raw materials from suppliers, components from their outsource manufacturers or be able to ship internationally
  • Agricultural importers and exporters will have goods rotting on the docks

In a study conducted in 2014, the National Retail Federation and National Association of Manufacturers estimated that a shutdown of ports in cities like Los Angeles, San Francisco, Portland and Seattle could cost the U.S. economy almost $2 billion per day. It also estimated that a five-day stoppage would reduce GDP by $1.9 billion a day, and would increase exponentially with a 20-day stoppage resulting in a loss of $2.5 billion a day.

It will be interesting to watch the domino effect of the labor unions “flapping their wings” over the next week or 2.

Follow me on twitter @howellsrichard

Assigned Tags

      Be the first to leave a comment
      You must be Logged on to comment or reply to a post.