What is the potential impact of a looming strike at East Coast ports on shippers and the broader supply chain?
With the threat of labor disputes, shippers are actively seeking alternative routes and ports to avoid disruptions. The strike could lead to significant delays and increased costs (such as detention and demurrage fees and congestion fees) for shipping, prompting businesses to explore options such as rerouting cargo through West Coast ports or using inland transportation networks.
It is critical for shippers to develop contingency plans in response to the uncertainty surrounding the labor situation at these critical ports: Boston, NY/NJ, Philadelphia, Baltimore, Wilmington, Charleston, Savannah, Jacksonville, Tampa, New Orleans, Mobile, and Houston.
Our team has outlined the highlights, impacts, and strategies of this quickly developing situation, set to potentially start on October 1:
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- Demanding another six-year agreement
- Hyper focused on no automation or even semi-automation
- Salary increases on par with the west coast ports longshoremen.
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- East and Gulf Coast ports account for 423% of imports
- Upwards of $3.7 billion moves daily through the port ($50,000 per container)
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- Develop contingency plans: Prepare alternative shipping strategies in advance
- Diversify port usage: Consider routing cargo through alternative ports not affected by the potential strike
- Build inventory: Increase stock levels of critical items to buffer against potential delays
- Explore alternative transportation modes: Consider air freight or land routes where feasible
- Stay informed: Monitor negotiations closely and maintain open communication with your logistics partners
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- It was reported that a one-day strike by the ILA would take five days to clear. A one-week strike in October could cause congestion that would last until mid-November.
- Recovery time from major disruptions can take 3-6 months, depending on the duration and severity of the event
- Port congestion alone can lead to a 20-30% reduction in effective port capacity
We are closely monitoring the evolving situation with the East Coast port strike and staying updated on the latest developments. Please feel free to reach out with any questions or concerns you may haveβwe’re here to assist you through this period of uncertainty.
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