Today, a logistics manager in Shanghai indicated that a major e-commerce platform's warehouses in the US are severely overstocked, anticipating a likely strike at East Coast ports.
On September 28, international logistics companies started informing clients about the strike's status and recommendations. Some ocean carriers announced additional congestion fees for ships arriving after October 1, ranging from $1,000 to $3,000 per container. Some carriers have rerouted to West or Central US ports instead of the East Coast.
Freight rates for Shanghai exports to major West and East Coast ports were $4,852/FEU and $5,626/FEU, falling by 9.2% and 13.3%, respectively. Despite weak demand, the congestion fees aim to mitigate potential strike impacts and stabilize rates.
Shipping companies are preemptively responding to possible East Coast strike-induced rate changes. Starting from October 1, Mediterranean Shipping Co. will impose emergency operational fees. In mid-October, CMA CGM and Hapag-Lloyd will introduce destination and disruption fees. From October 19, HMM will also implement destination fees to cover costs from potential disruptions like strikes and delays in East Coast and Mexican ports.
On September 23, Maersk announced that from October 21, all cargo at East Coast and Mexican ports would face local disruption fees, depending on container size.
According to Maersk, an impending strike by the International Longshoremen’s Association (ILA) will disrupt supply chains, increasing costs and causing transport delays. The ongoing labor dispute might further affect import-export activities, container availability, and operational efficiency.
As of September 26, the USMX filed unfair labor practice charges against the ILA with the National Labor Relations Board, demanding renewed negotiations for a contract. On the other hand, ILA has stated that 85,000 union members plan to strike on October 1, affecting all Atlantic and Gulf Coast ports from Maine to Texas.
The Port of New York-New Jersey, the second-largest US container port, warned cargo owners to pick up goods by September 30. After this date, terminals will halt exports and not accept new ships.
Maersk suggested labor disruptions would become clearer post-October 1. They advised clients that contingency plans are in place to manage refrigerated containers and other emergency incidents during labor disputes.
Despite imminent strikes, the market hasn’t shown preemptive concern, with freight rates dropping for six consecutive weeks. North American routes continue to face weak demand and a poor supply-demand balance, causing spot market booking prices to fall.
Post-holiday, if unresolved labor issues persist, rates will likely rise. The West Coast ports might also be impacted, with rate hikes depending on port congestion levels. Recent fires at multiple terminals in Los Angeles and Long Beach have had minimal impact. Future shipments to North America need to monitor the strike's progression closely.
An international logistics company predicted extra fees might apply for container pick-up and return at East Coast ports, increasing local storage pressures and pushing logistics prices higher. Some ships might reroute to Central and West US ports to avoid port risks, causing congestion and rate hikes across other ports. Logistics suppliers might face unprecedented reservation and delivery pressures, complicating East Coast delivery operations further.
If the strike occurs, Sea-Intelligence estimates clearing backlogs could take 4 to 6 extra days. Drewry also highlighted emergency measures, such as halting inland goods transport and adding congestion fees, are in place by ports, shipping companies, and regulators. Prolonged strikes could impact global shipping schedules, goods supplies, and container freight rates.
