The looming threat of a strike at US East Coast and Gulf ports has sparked concern across the global shipping industry, with less than a week to go before the potential start on 1st October.
Despite calls from 177 trade associations for the White House to intervene, the government has declined to use the Taft-Hartley Act, which could have delayed the strike. This decision has left port employers and ocean carriers urging the International Longshoremen’s Association (ILA) to resume negotiations, which remain stalled over key issues such as wages and automation.
As the potential for a strike grows, the impact is already being felt in shipping rates. Transatlantic shipping costs have spiked, particularly on routes from North Europe to the US East Coast, with rates rising by 16% week-on-week. Although some of this increase is attributed to peak season surcharges.
Under US Federal Maritime Regulations, any ocean freight rate increases or surcharges must be communicated to the trade at least 30 days prior to implementation. With the ILA strike potentially commencing on 1st October, the first ‘Emergency Operations Surcharge’ (EOS) announcements were issued on 1st September, covering all shipments from Europe to the US east and Gulf coasts, with some also applying to ports in the Caribbean, Mexico, and Canada.
Most major container shipping lines have now published EOS and strike intervention surcharge notices, with implementation dates ranging from 1st to 19th October. Surcharges vary, ranging from USD 800 to 2,400 for 20-foot containers, and USD 1,600 to 3,000 for 40-foot containers. These early indications suggest the likelihood of significant rate increases if the strike proceeds as anticipated.
The impact of a strike would ripple beyond the US, potentially affecting global supply chains. Experts suggest that, even if the strike lasts only a week, the knock-on effects could disrupt operations for months, particularly in Asia. Vessels stuck at US ports in early October would not be missed in Asia for five to seven weeks, delaying the pre-Chinese New Year rush and amplifying the strike’s consequences on international trade.
For US exporters, particularly those in the automotive and agricultural sectors, the impact could be severe. Agricultural exports might drop, leading to potential food price increases in reliant countries, while automotive supply chains could see significant slowdowns.
Mitigation
To mitigate potential disruption, we are taking proactive steps to move all shipments out of the ports and return empty containers by 30th September to avoid per diem and detention charges. Trucking capacity is expected to tighten, but our team is working hard to ensure the smooth clearance and collection of all cargo arriving ahead of the strike.
Contingency plans include alternative routes through Canada and alternative air freight solutions, which, despite the higher cost, could prove particularly effective during the strike.
As this situation evolves, we are actively monitoring developments and will continue to communicate essential updates to ensure our customers are informed of any changes. Our team is closely engaged to minimise disruptions and adapt to changing conditions as they arise.
If you have concerns about the impact of an ILA strike, we can review your situation, explain your options and, if necessary, consider contingency plans.
Global Forwarding USA has dedicated departments for ocean, air and national customs brokerage, with domestic transport for container movements, LTL and FTL.
EMAIL Adam Davies, Global Forwarding USA, Vice President.
