U.S. Port Strike Could Trigger Major Shipping Delays Worldwide

The potential strike by East and Gulf Coast port workers is already affecting U.S. trucking networks. To avoid delays, shippers are moving goods earlier, increasing demand on trucking and tightening capacity. If it lasts more than a few days, the impact from the strike will be more severe and affecting areas much further inland from ports.

Drayage and trucking companies are taking proactive measures this week by retrieving containers from ports in the Eastern and Southern U.S. ports, sending some containers to the West Coast via intermodal trains, and seeking space to transload and store goods and containers.

The strike could lead to a recovery in trucking prices, which have been low for most of 2024. Spot rates for truckloads have remained flat, while contract rates have stabilized. There are signs rates could increase likely in 2025, but a lengthier strike might reset these expectations.

Many businesses that prepared contingency plans during the pandemic are implementing them now to avoid disruptions. If the strike lasts more than a week, it could take until the end of the year to catch up. A prolonged strike will bury the ports in backlogged containers, and when the ports reopen, all shippers will need their goods at the same time, which will strain trucking capacity.

Source: Journal of Commerce

 

The fallout from a potential strike on the U.S. East and Gulf coasts will be considerable, and the consequences of the disruption will be felt into 2025.

Peter Sand, chief analyst at Xeneta, warned ships en route to the ports could be stuck at U.S. East and Gulf Coast anchorages. He pointed out that many of the vessels would be unable to reroute. While some may head to ports in Canada or Mexico, most will have to wait.

This will delay the return of vessels to the Far East, potentially affecting shipping schedules through January 2025. “A strike lasting just one week will impact schedules for ships leaving the Far East on voyages to the U.S. in late December and throughout January,” Sand noted.

In August alone, $194 billion worth of goods passed through U.S. ports, with over 50.6% handled by East and Gulf Coast ports. Maritime analyst John McCown pointed out that 16% of the global container fleet serves ports on these coasts.

Source: The Loadstar