Strike grinds coffee shipments to a halt at East and Gulf Coast ports

The ongoing strike by unionized dockworkers at East and Gulf Coast ports has ground to a halt the unloading of imported coffee shipments, setting up a supply squeeze for coffee drinkers in the U.S. — the world's largest coffee-drinking nation.

For the first time since 1977, the International Longshoremen's Association (ILA) and its 45,000 dockworkers went on strike at dozens of ports that collectively handle about half of the country's seaborne imports. The union is demanding better wages and restrictions on port automation, and negotiations are at an impasse with the U.S. Maritime Alliance (USMX), which represents port employers.

ILA President Harold Daggett has signaled the union is willing to persist in its strike to get its demands even if it means inflicting broader damage on the U.S. economy. "I’ll cripple you," Daggett said about the effects of the strike in a September interview. "I will cripple you and you have no idea what that means. Nobody does."

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Americans purchased about 164.2 billion six-ounce cups of coffee from October 2022 to September 2023, which equates to about 3.26 billion pounds of coffee, according to U.S. Department of Agriculture (USDA) data used in an analysis by USAFacts. 

Most of that is imported, as the U.S. produced just 11.5 million pounds of coffee in Hawaii during the 2022-23 season, meaning the U.S. consumed about 282 times as much coffee as it produced, per the report. 

A USDA report on the coffee market for the 2023-24 season found the countries that export the most coffee to the U.S. are Brazil (27%) and Colombia (19%). Due to their proximity to those countries, East and Gulf Coast ports are key destinations for America's coffee imports.

"The ports impacted by this strike are vital to coffee, and we urge everyone involved to work constructively to avoid further disruptions," National Coffee Association CEO William "Bill" Murray told FOX Business in a statement. 

"Failing to do so will considerably harm the two-thirds of Americans who drink coffee each day and the 2.2 million hard-working people working throughout America’s coffee supply chain," he added. 

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Reuters reported that one unnamed coffee trader at one of the largest U.S. coffee importers, who requested anonymity because he wasn't authorized to speak publicly on the subject, said that, "We have some 40 containers waiting to be moved."

"The owners of the containers have already told us they will charge additional fees if the boxes take longer than normal to be returned," the trader added. He also noted that there may be a "supply squeeze" in some regions of the U.S. due to the strike.

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The strike and supply disruption comes as U.S. coffee inventories have been at historically low levels, as importers have opted against maintaining high inventory levels as a means of reducing storage costs due to high interest rates.

Coffee bean prices hit multi-year highs last week due to limited supply, and delays in the delivery of more coffee imports to U.S. roasters and coffee chains could cause those costs to rise even further for companies and consumers.

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"We source coffee from 35 different countries," Will Ford, president of operations at Arkansas-based Westrock Coffee Company, told Reuters. "If this [strike] goes on for a long time, everybody will be impacted."

Reuters contributed to this report.