02:03 PM EDT, 10/01/2024 (MT Newswires) -- A dockworker strike at ports on the US East and Gulf coasts may last for a few days or weeks, while the import-heavy retailers are seen the most at risk from potential supply disruptions heading into the holiday shopping quarter, analysts said Tuesday.

The International Longshoremen's Association union launched the strike early Tuesday after rejecting the United States Maritime Alliance's final proposal on a new contract. This prompted a shuttering of ports from Maine to Texas.

The alliance known as USMX, which represents terminal operators and ocean carriers, had offered to increase wages by "nearly 50%" and "retain the current language around automation and semi-automation," among other proposals, it said Monday. The ILA, which represents about 85,000 workers, said the offer "fell short" of what its members were demanding.

BofA Securities said its base case calls for a strike to last no more than a few days or weeks before US President Joe Biden invokes the Taft-Hartley Act to reopen the ports, though it's unclear when he might do so.

"Wage negotiations might be resolved by political pressure, but automation is a difficult issue for both sides and will inevitably take time with negotiations having stalled in recent months," the brokerage said in a note to clients.

Separately, Biden called on USMX to negotiate "a fair contract" with the striking workers, according to a statement released by the White House. Ocean carriers have earned "record profits" since the pandemic, with executive compensation increasing in line with those profits, Biden said. "It's only fair that workers, who put themselves at risk during the pandemic to keep ports open, see a meaningful increase in their wages as well," he said.

A strike lasting a few weeks is expected to drive global congestion levels to record highs and potentially result in a sharp increase in spot freight rates, BofA said. The strike could boost air cargo demand as inventory shortages can't be ruled out if the work stoppage lasts a few weeks, according to the note.

Separately, Wedbush Securities said that although import-heavy and holiday-focused retailers are likely most at risk, majority of retailers likely adjusted their schedules in anticipation of a disruption, limiting near-term downside risk.

"While most hardlines retailers have some direct or indirect exposure to looming port shutdowns, those with the highest mix of imports that are holiday-centric retailers are Best Buy ( BBY ) , Wayfair ( W ) , Dick's Sporting Goods (DKS), Academy Sports and Outdoors ( ASO ) and Williams-Sonoma ( WSM ) ," Wedbush analysts Seth Basham and Matthew McCartney said in a note to clients. RH (RH) could also be impacted given its "high reliance" on imports, the analysts said.

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