Container xChange has provided an update on the potential for strikes across US’ East Coast ports, as industries brace for significant disruptions.
Ongoing discussions between the International Longshoremen’s Association (ILA) and the United States Maritime Alliance (USMX) is threatening to bring operations to a standstill, having flow-on effects on supply chains and the US economy.
East Coast ports in New York, New Jersey and Baltimore are the targets for the strikes, with the strike slated to begin on October 1.
If it does go ahead, Container xChange estimates it’ll cost the US economy more than US$1 billion per day.
This means essential goods like imported retail items, automotive parts and perishables could be left stranded at ports or rerouted at a higher cost, with Oxford Economics warning that a prolonged strike could also impact up to 100,000 jobs.
Currently, companies are considering shifting cargo to the West Coast or opting to use air freight.
“The strike could push the container trade into chaos, with ripple effects that potentially will disrupt supply chains well,” Container xChange cofounder and CEO Christian Roeloffs says.
“The congestion and delays at these major ports will severely impact the availability of containers, increase costs, and disrupt schedules. Small traders, in particular, may feel the squeeze as they are more vulnerable to price surges and extended delays in securing and moving their boxes.
“Businesses are acting now to reroute shipments and secure their container supply, or they risk being left stranded in a congested and costly aftermath.”
Immediate supply chain challenges of a strike would include stranded cargo, with 42 container ships scheduled to arrive at New York and New Jersey alone in the coming days, rerouting challenges and cost escalations, such as what has been seen with Maersk announcing a disruption surcharge for all cargo moving to and from US East and Gulf Coast terminals from October 21.
Hapag-Lloyd is also planning to implement a ‘Work Interruption Destination Surcharge’ for imports from East Asia on October 19, and a surcharge for cargo from the rest of the world from October 18 at a cost of US$1,000 per TEU.
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