US East Coast Strike Action: Latest Update

Date Added: 20 August 2024

USA PORT STRIKES

Summary


Negotiations for a labour contract covering trade hubs from Boston to Houston have stalled since June, and a labour strike is looking increasingly likely.  
This would result in the shutdown of six out of ten of the busiest ports in the US just weeks before the presidential election.

The International Longshoremen's Association has announced that it will present final contract demands to union delegates at a meeting on September 4th and 5th. It will also discuss strike strategies in the event a deal isn't reached before the September 30th deadline.

Impact of strike action
Disruption and delays will be inevitable if strike action takes place. Space on the east coast and west coast is limited, so all shippers will be looking at the same contingency.

Additional space will become a valuable commodity; some carriers are already full until mid-September.

Stress Conditions
Global maritime trade is already under strain due to the sustained attacks by Houthi rebels, resulting in freight carriers avoiding the Red Sea route.

Looming trade tariffs encourage importers to deliver goods before global trade wars heat up. Even the threat of a port walkout can be disruptive, as shippers seek alternative routes for their imports and exports.

Restricted Options
Unfortunately, we cannot rely on extra ship calls to the west coast to alleviate the impact of east coast strikes. Historically, union workers have stayed united during strikes and have refused to work additional vessels that are used to bypass ports affected by strikes.

Carriers impose Peak Season Surcharge (PSS)
Davies Turner has received notification from multiple carriers on the North American trade of the intention to impose an emergency PSS effective 1st September. This decision has been made due to the ongoing high demand on the Trans-Atlantic trade.

We want to assure our customers that we are working closely with the carriers to explore available options and provide the best support possible.

Likelihood of a walk out
Our American partners have informed us that similar concerns and negotiation tactics have been seen in other potential strike situations. These were typically resolved with minor work slowdowns instead of a full-blown strike.

Due to the timing of this potential strike, 4 weeks before the presidential elections and 6 weeks before the holiday shopping season. The retail association will increase pressure to avoid it.

We remain hopeful that an agreement will be reached before any drastic measures are taken, but there is of course a possibility of a work stoppage until the contract is signed.

Assistance and support
We have a wealth of experience handling supply chain disruptions and are ready and equipped to support our clients.

Our ocean freight teams are closely monitoring US services and will make direct contact with clients should any shipments face delays.

Recommendation
As space is already becoming restricted on the US trade, where possible we would advise shippers to book early and incorporate additional lead time into inventory planning, in order to help reduce the risk of stock shortages, missed delivery deadlines, and other logistical challenges brought about by the pending strike action.

Alternative option for time-sensitive goods
Air freight: Our award-winning airfreight services provide an extensive range of scheduled, charter and specialist carrier options.

Contact us
We have a large team of ocean experts throughout the UK who are on hand to answer your questions and provide options to help mitigate the impact of any disruption.

If you have any concerns please do not hesitate to speak with your usual Davies Turner contact.