Impending dockworker strike on the US East and Gulf Coast

Starting October 1, 2024, a shutdown threatens the ports on the US East and Gulf Coasts. Negotiations between the International Longshoremen’s Association (ILA - union) and the United States Maritime Alliance (USMX - employer association) have been cut off, with no agreement yet reached on a new labor contract. Shipping lines and logistics providers are already taking measures to mitigate potential supply chain disruptions. Companies shipping goods to the US should prepare for delays and additional costs.

In total, thirty-six ports along the US East and Gulf Coasts could be affected, including major hubs such as the ports of New York/New Jersey, Charleston, Norfolk, Savannah, and Houston. These ports are crucial for transatlantic trade between Europe and North America, particularly for the automotive, chemical, and consumer goods industries.

Background of the Strike
The ILA has announced that it will not extend the current labor contract, which expires on September 30, 2024. The union's main demands include higher wages to compensate for the hard work during the pandemic years, as well as the protection of jobs threatened by automation. One example is the introduction of automated gates by terminal operator "APM Terminals" at the Port of Mobile, Alabama.

Initial Measures by Shipping Lines
Many shipping companies have already begun preparing for the impending strike by limiting new bookings or announcing surcharges. These additional costs, which can reach up to $1,500 per TEU depending on the shipping line, will significantly raise transportation expenses for businesses. Freight rates on the transatlantic market have already risen due to high demand and the upcoming US elections. The tightening of transport capacity and increasing demand for alternative routes are likely to further fuel price increases.

Impact on Logistics and Emergency Plans of the Ports
The ports themselves are also preparing for the strike and have published contingency plans, including the following measures:

• The Port of Savannah has advised its customers to collect their cargo before October 1, as terminals will be closed in the event of a strike.
• The Port of Houston will keep its container terminals open until 7 PM on September 30, with a cutoff for export drop-offs at 6 PM. Cargo remaining at the terminal after 7 PM will be unavailable for the duration of the strike.
• The Ports of New York/New Jersey and Houston have announced extended operating hours to expedite cargo processing before the strike.

However, diverting cargo to alternative routes, such as via Canadian ports, does not offer complete planning certainty. Due to increased demand for these routes, rail transport capacity from Canada to the US will also be heavily strained.

The upcoming work stoppages on the US East and Gulf Coasts will have far-reaching consequences for international trade. Companies relying on these ports should expect delays and significant additional costs for pre- and post-carriage, as well as demurrage and detention fees. Given the uncertainties and potential duration of the strike, it is advisable to take early action to minimize the impact on business operations.

We are closely monitoring the situation in the US and will proactively explore all options to ensure your logistics run as smoothly as possible.

If you have any questions or need further information, please feel free to contact your EgeTrans representative or reach out to us - we are happy to assist.