How Could a Sustained East Coast Port Strike Affect Small Businesses in Northwest Missouri and the Midwest?

The port strike has been suspended, but how might an interruption like this affect small businesses if it happens again? A port strike on the East Coast of the United States might seem distant from Northwest Missouri, but the effects could ripple through the local economy, impacting small businesses in significant ways. According to the National Association of Manufacturers, more than 68 percent of all containerized exports and more than 56 percent of containerized imports flow through East and Gulf Coast ports, representing an average daily trade value of more than $2.1 billion. They handle more than 91% of containerized imports and 69 percent of containerized exports of pharmaceutical products. Additionally, 54 percent of containerized vehicle imports move through these ports.

It’s easy to see how supply chains and the movement of goods are interconnected across the country. A disruption at major ports could lead to delays, increased costs, and inventory shortages.

Supply Chain Disruptions

Whether it’s agricultural equipment, retail products, or materials for manufacturing, these items often travel long distances across multiple transportation modes—cargo ships, railroads, and trucks—before reaching their final destination in Northwest Missouri. A port strike could cause significant delays as cargo ships wait offshore, their goods wasting away in metal containers instead of being unloaded and moved to distribution centers. This can lead to backlogs that could take weeks or months to clear, meaning small businesses in Missouri might experience delays in receiving crucial products.

Small retailers, in particular, could face severe challenges. A strike could mean empty shelves, unsatisfied customers, and lost sales if they rely on specific products imported through East Coast ports. For example, a small clothing store in Maryville, Missouri, that orders apparel from East Coast wholesalers might struggle to keep seasonal items in stock (Fall is here, and the Christmas season is fast approaching). Missed opportunities could harm their bottom line, especially during critical shopping periods like the holiday season.

Rising Costs and Price Increases

In addition to delays, a port strike could lead to increased transportation costs. As goods pile up at East Coast ports, businesses may need to find alternative ways to bring in products. Some business owners may reroute goods through other U.S. ports on the West Coast or the Gulf of Mexico. While these ports could help alleviate the bottleneck, transporting goods across the country from these locations may add significant shipping costs.

For small businesses in Northwest Missouri, these higher transportation expenses could increase prices for them and the consumer. For example, a small hardware store in St. Joseph, Mo., might be forced to raise prices on items sourced from East Coast distributors to offset the cost of shipping delays and rerouting. This would impact not only the store’s profitability but also its customers, who might be unwilling or unable to pay higher prices. Even small price hikes can affect buying decisions, putting additional strain on local businesses.

Inventory Management and Cash Flow Challenges

Many small businesses operate on thin margins and lean inventory systems, often using just-in-time (JIT) inventory practices to avoid holding excess stock. Shipment delays might mean lost sales. Businesses may run out of critical items, sending consumers elsewhere. At the same time, if companies try to order extra inventory to hedge against potential future disruptions, they could tie up much-needed cash flow to stock store shelves and not have enough for basic necessities down the road. This is particularly concerning for small businesses with limited financial flexibility.

For example, a small manufacturer in Northwest Missouri that relies on specialized components from East Coast suppliers might face production slowdowns. As a result, they may be forced to purchase additional supplies elsewhere for a higher price. The following week, if a truck in their small fleet breaks down, they may not have the cash to fix it. On the other hand, if they don’t invest in additional parts, their delivery will be delayed. This could result in missed deadlines, dissatisfied customers, and financial strain due to tied-up capital in incomplete products.

Overal Impact

Though Northwest Missouri is far removed from the coastal ports of the U.S., a strike on the East Coast could still create serious challenges for small businesses in the region. Delays, increased costs, and inventory disruptions would affect their ability to operate smoothly and profitably. For small businesses that already face tight margins and limited resources, these challenges could make it harder to compete and thrive in an increasingly global and interconnected economy.