A look back in history shows how a key group of transportation stocks performed the last time there was a major port strike, according to Wolfe Research. On Tuesday, 50,000 members of the International Longshoremen's Association (ILA), the largest longshoremen's union in North America, went on strike at 14 major ports along the Gulf of Mexico and Eastern Seaboard, affecting billions of dollars in trade as well as roughly half of all U.S.
trade activity. The walkout came after failing to reach an agreement on a new contract over wage increases and automation. For investors, the effect of the strike depends on how long it lasts, Wolfe said.
But with President Joe Biden, who has the power to order strikers back to work using an 80-day cooling off period under the Taft-Hartley Act, unlikely to act soon, Wolfe said many of its business contacts are preparing for the stoppages to continue for the next two- to three weeks. Against that backdrop, Scott Group, a senior analyst covering freight transportation at Wolfe, looked at transportation stocks in 2002, the last time there was a major port strike in the U.S.
That strike, which lasted just 11 days and affected only West Coast ports, hurt transportation stocks throughout the protest, he said. But those same stocks staged a major comeback in the month after the strike ended. Here are how some key stocks performed during and after the last major strike.
C.H. Robinson Worldwide was among the biggest laggards during the last port strik.