News
US East Coast strike – Update
Attention: Shipping Manager
We have received confirmation from the Freight Trade Alliance (FTA) that the industrial action at US East Coast and Gulf ports has commenced. This action is expected to have significant implications for global supply chains, including Australian trade.
Following is some key information to assist in understanding the potential impacts and to prepare for any potential disruptions:
- The current situation and affected ports:
The International Longshoremen’s Association (ILA), representing 45,000 dockworkers across 14 ports, has initiated a strike after failing to secure a new labour agreement with the United States Maritime Alliance (USMX) by the September 30, 2024 deadline.
The ILA strike affects 36 ports in total, in which 14 are major U.S. East Coast and Gulf Coast ports, including Baltimore, Boston, Charleston, Houston, Jacksonville, Miami, Mobile, New Orleans, New York/New Jersey, Norfolk, Philadelphia, Savannah, Tampa, and Wilmington. These ports are critical hubs for U.S. containerised trade.
- When is the strike expected to end?:
There is no clear end in sight for the strike. Even if it lasts only a few days, its effects could be felt into 2025 due to port congestion and ongoing supply chain disruptions.
- Key issues leading to the strike:
The strike revolves around disagreements on wage increases, benefits, and port automation. The ILA has rejected what they called an “unacceptable” wage package, which reportedly included a near 50% wage increase over 6 years and an agreement to keep limits on automation from the old contract.
- Government Response:
Despite hopes for intervention, President Joe Biden has declined to use the Taft-Hartley Act to seek an 80-day cooling off period. The White House is urging both sides to reach a quick, fair resolution.
- Strike Impact:
The strike has already begun to significantly impact global trade. Ports on the East Coast and Gulf Coast handle 40-50% of U.S. container imports, and disruptions are affecting shipments, particularly from Europe and Latin America. Vessels are likely to remain anchored outside affected ports, with significant delays in returning to the Far East, causing broader disruptions to global shipping schedules well into 2025. Estimated daily economic impact: $3.8 billion to $4.5 billion in losses if East and Gulf Coast ports remain closed.
The potential backlog at U.S. ports could slow down the movement of goods, increasing shipping times and costs. Cargo destined for U.S. East Coast and Gulf ports may be stuck on vessels or delayed within congested terminals. Furthermore, congestion on the West Coast, now experiencing record levels of traffic, may further compound supply chain challenges, creating an even more severe backlog as shippers shift their volumes from the East Coast.
As advised in our recent broadcast, shipping lines will be charging congestion/disruption surcharges as a result of this and we will have no option but to pass these charges on.
(Source: Freight Trade Alliance)
If concerned about your shipments, please do not hesitate to contact your customer service representative.
We will keep you updated with any further information.
Regards,