Shippers using US east and Gulf coast ports face growing uncertainty as the deadline for contract negotiations between the International Longshoremen’s Association (ILA) and the United States Maritime Alliance (USMX) approaches.
Without an agreement by 15th January, a coast-wide dockworker strike involving 45,000 union members could cause major disruptions across the region.
Negotiations resumed on 7th January, leaving less than a week to finalise a master contract. While the parties have agreed on wage increases, disagreements over automation remain a significant hurdle. Adding complexity, President-elect Donald Trump’s support for the union against automation could influence the outcome.
To prepare for potential disruptions, we are monitoring the situation closely and providing shippers with a range of contingency options to keep their supply chains moving.
We strongly encourage importers to collect laden containers and return empties or loaded export containers at US east and Gulf coast ports before 15th January. Acting early can help mitigate potential delays and avoid surcharges from carriers or terminals.
To minimise disruptions, we can offer alternative solutions including:
Air freight: We have import and export air freight options available. While costs are higher, this is a fast and reliable solution to bypass port disruptions.
West coast diversion: Some shippers are diverting cargo to Los Angeles, with onward transport via rail or trucking to final destinations. While more complex, this option ensures cargo keeps moving.
Canada trans-loading: Bonded trans-loading allows goods to enter Canada and move to the US through Montreal or Toronto without delay. Though costly, this approach offers a viable alternative for critical shipments. We can provide a cost-benefit analysis for shippers interested in exploring this option.
Carrier mitigation
With spot rates on trans-Pacific shipments to the east coast already climbing, shipping lines are taking proactive measures to mitigate potential disruption:
Maersk: Advising shippers to clear laden containers and return empties at east and Gulf coast ports before 15 January to minimise terminal congestion.
Hapag-Lloyd: Introducing a “Work Disruption Surcharge” and “Work Interruption Destination Surcharge” of $850 per TEU or $1,700 per FEU from 20 January.
CMA CGM: Implementing a $1,500 “Peak Season Surcharge” on 15 January for shipments from the Indian Subcontinent, Middle East, Red Sea, and Egypt to east and Gulf coasts.
Yang Ming: Applying a “Port Congestion Surcharge” of $800 per TEU and $1,000 per FEU from 15 January for US and Canadian ports.
MSC and Zim: Announcing surcharges tied to potential labour disruptions, with MSC also restructuring its trans-Atlantic network following its exit from the 2M Alliance with Maersk.
We are working closely with shippers to navigate these complexities, offering tailored solutions to ensure supply chains remain resilient. Our team can assist with contingency planning, including alternative routes, securing additional capacity, and minimising added costs.
To explore mitigation solutions for your business, EMAIL Adam Davies, Vice President.
