Countdown to US East coast port strikes

As tonight’s (30th September) midnight deadline approaches, marking the expiration of the existing labour contract, the shipping industry is bracing for potential strikes by the International Longshoremen’s Association (ILA) on the US East and Gulf coasts. With significant disruptions looming, preparations are underway across the sector.

Under US Federal Maritime Regulations, any ocean freight rate increases or surcharges must be announced at least 30 days before their implementation. As the ILA strike could begin on 1st October, the first ‘Emergency Operations Surcharge’ (EOS) announcements were made on 1st September, impacting all shipments from Europe to the US East and Gulf coasts, with some surcharges extending to ports in the Caribbean, Mexico, and Canada.

Most major shipping lines have now issued EOS and strike intervention surcharge notices, with implementation dates ranging from 1st to 19th October. Surcharges vary between USD 800-2,400 for 20-foot containers, and USD 1,600-3,000 for 40-foot containers. These increases are an early indication of the potentially substantial rate hikes if the strike materialises.

While the immediate effects may not be fully felt, a strike could tie up vessels for extended periods, creating significant backlogs and leading to shortages of goods in key markets. The automotive and agricultural sectors are particularly at risk, with expected delays possibly resulting in higher food prices and production slowdowns across the US.

Despite pleas from 177 trade associations, the US government has declined to invoke the Taft-Hartley Act, which could have delayed the strike. Although the Department of Labor has reached out to the United States Maritime Alliance (USMX), it has been unable to schedule further talks with the ILA to resolve the dispute over the new Master Contract.

The ILA has rejected the USMX’s latest offer, citing insufficient entry-level wages and opposing any form of automation at ports. With no further negotiations planned, a strike affecting over 50% of US shipping traffic, from Maine to Texas, is increasingly likely.

Such a strike could halt half of US container operations, with carriers already placing embargoes on cargo destined for affected ports. A shutdown of loading, unloading, and container handling could lead to extensive backlogs, increased freight fees, and additional costs for storage, detention, and chassis use. These impacts will ripple through global supply chains during the peak shipping season.

Actions to mitigate strike-related disruptions:
1. Delay shipments: Postpone origin shipments until after the strike to avoid disruption.
2. Diversion: Redirect urgent shipments to West Coast, Canadian, or Mexican ports, though space may be limited.
3. Alternative mode: Air freight can ensure the most urgent cargo moves, though at a higher cost.
4. Intermodal solutions: Use rail and road freight for landed cargo to bypass affected ports.
5. Plan for congestion: Expect congestion at unaffected ports and higher rates for freight and container handling.

Efforts are in place to ensure that East Coast arrivals are swiftly cleared and empty containers returned by 30th September to avoid detention charges. As trucking capacity tightens, we are coordinating collections and preparing alternative routes through Canada and air freight options to minimise delays.

To discuss how to protect and optimise your supply chain during this period, please EMAIL Matt Fullard.