A second port strike in the U.S., which threatened to disrupt everything from transportation and logistics to retail and autos, has been avoided. That could be good news for retail stocks like Dollar Tree (DLTR) and Target (TGT), but less positive for carriers like FedEx (FDX) and UPS (UPS).
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Pleasingly for consumers and investors, the International Longshoremen’s Association (ILA), which represents about 45,000 dock workers on the East and Gulf Coasts, reached a six-year deal with the employer group, the United States Maritime Alliance (USMX).
Retail Stocks Could Be Winners
Last year, dock workers walked out for the first time since 1977, so averting a second strike is a major win for Donald Trump, who ILA boss Harold Daggett said deserves “full credit” for the deal.
A strike would have clearly impacted the U.S. economy, with investors particularly worried about inflation and the path for future Fed rate cuts.
However, several retail stocks could benefit more than others.
Truist analyst Scot Ciccarelli explained during last year’s strike that many retailers moved up their import timelines and rerouted shipments to the West Coast. Nevertheless, he noted that the strike led to higher logistical and supply chain costs, including increased container rates, ground transport costs, and product shortages.
He identified DLTR and TGT as among the most exposed, along with Walmart (WMT), Five Below (FIVE), and Best Buy Co. (BBY).
Transports Are More Complicated
Averting a strike could be positive for railroads, as they handle many containers coming out of ports. Union Pacific (UNP) and Norfolk Southern (NSC) are among the top stocks in this sector. UNP suffered a decline during the last strike, though NSC held up.
During the first strike last year, Baird analyst Garrett Holland suggested using any port-related weakness as an opportunity to add to railroad positions, believing any disruption would be temporary.
Meanwhile, Stifel analyst Bruce Chan argued that international airfreight companies like FDX and UPS would benefit from port disruption. Ultimately, avoiding a hit to the broader economy—which Jefferies analysts estimated could have been $4 billion during the first strike—is a positive outcome.
Finally, freight brokers such as Forward Air (FWRD), C.H. Robinson Worldwide (CHRW), and Expeditors International of Washington (EXPD) may see fewer tailwinds than they did last time, as customers are no longer rerouting shipments.
Which Stocks Are Affected by Port Strikes
Investors looking to track different stocks affected by events like port strikes can look at the TipRanks Compare Stocks tool to analyze performance metrics, assess market trends, and make informed investment decisions.
