Strike Update: Prolonged strike could push up rates at East, West Coast ports
The port strike by 45,000 dockworkers halting shipments at U.S. East Coast and Gulf Coast ports from Maine to Texas enters its third day on Thursday with no negotiations scheduled (as of late Wednesday afternoon).
In this week’s international freight update from global freight booking platform Freightos, the company noted that in the final days before the strike, trucks rushed to move containers off yards and some carriers offloaded imports and skipped remaining East Coast port calls to avoid getting caught in the shutdown.
Other insights from the report are below.
•Some carriers stopped accepting reefer bookings for the East Coast and are rolling out surcharges for container bookings in October, which are likely – together with congestion and delays – to push East Coast rates up even while ports are closed.
•Most arriving vessels will wait offshore for ports to reopen as alternative East Coast ports – including Montreal, where half of the terminals are shut down by a strike till Thursday – will not be able to handle large scale diversions.
•A prolonged strike and a significant shift of demand to the West Coast could lead to congestion that would further slow down operations, tie up capacity and push rates up on the West Coast as well.
•It remains to be seen if we’ll see a sustained wide scale strike or shutdowns at only at some ports, only on certain days or just a slowdown of operations as the ILA seeks to both pressure operators and avoid government intervention.
The nation’s biggest retailers have been implementing backup plans to minimize the effect of the strike as they head into the holiday season. Costco Wholesale Corp. CEO Ron Vachris addressed the issue during the company’s earnings call last week, saying Costco had contingency plans to work around possible shipping delays and has done several different things “to get holiday goods in ahead of this time frame.”
“Our buyers are all over it,” he told analysts. “They’re watching it closely, and we’ve taken as many preemptive measures as we could to prepare for this.”
Walmart struck a similar note.
“We prepare for unforeseen disruptions in our supply chain and maintain additional sources of supply to ensure we have key products available for our customers when and how they want them,” a Walmart representative said in statement to Quartz.
