Dear Valued Client
We would like to notify you that the probable labour strike at U.S. East and Gulf Coast ports could cause major supply chain disruptions.
Current contract discussions between the United States Maritime Alliance (USMX) and the International Longshoremen’s Association (ILA) could result in a strike as early as 01st October 2024 if an agreement is not reached by 30th September 2024.
Given the nearness of the forthcoming election, there is little chance that the Biden administration will apply the Taft-Hartley Act and force workers back to their employment, even though the ILA has prepared for a strike.
Although the likelihood of a strike on 1st October 2024 is currently higher than it has been in previous days, it is still unclear how long the strike would last.
The impact on cargo entering and leaving North America will vary according to how long the strike lasts. It is anticipated that foreign hubs like Panama, Jamaica, and the Bahamas would play a crucial role in serving as storage facilities for presently-transiting East Coast and Gulf Coast containers.
If they proceed with the strike, expect alterations to services.
What You Need to Know:
- Strike Risk: As long as unresolved concerns like salary rises and port automation persist, there is a greater chance of a strike.
- Possible Impact: A strike may seriously impair major ports’ ability to operate, leading to backlogs, delays, and extra expenses.
- Affected Ports: Houston, Savannah, Charleston, New York, and Savannah are among the ports that might be impacted.
How Ocean Carriers Are Preparing:
Shipping lines are proactively implementing contingency measures to minimize disruptions, which include,
- Rerouting Cargo: In order to avoid the impacted areas, carriers are looking at alternate routes through ports on the West Coast as well as ports in Canada and Mexico.
Advancing Shipments: In order to guarantee that vital supplies reach before the possible hit, carriers are moving cargo as quickly as possible. - Capacity Adjustments: In order to manage possible congestion, carriers may modify schedules and temporarily lower capacity on particular routes.
- Blank Sailings: In order to maximize vessel availability and account for delays, certain carriers may also announce blank sailings, or cancelled voyages.
If a strike is confirmed, ocean freight rates are expected to surge by 01 October 2024, with some carriers already filing GRIs (General Rate Increases) as high as $2,000 per 40’ container.
Additional Reads:
Brace for impact: port strikes loom on the U.S. East & Gulf Coast
Source: www.project24.com
MSC Customer Advisory : US East And Gulf Coast Port Strike Disruption
Source: www.msc.com