Global Supply Chains May Take Weeks To Recover After Workers’ Strike At U.S. Ports End

The workers’ strike at U.S. ports ended after a tentative wage agreement was reached between the International Longshoremen’s Association and the United States Maritime Alliance.

They also extended the Master Contract till 15th January 2025 to enable further negotiations, especially around port automation.

However, over 40 ships are in the queue to unload their massive cargo at the ports, showing that the ordeal is not yet over.

The strike continued for three days, impacting 44 vessels at the ports and over 120 en route to the ports.

Peter Sand, Chief Analyst at Xeneta, said that if the strike had continued longer, it would have been toxic for the supply chains, so the market has breathed a sigh of relief.

He added that the closure of all ports just for a short time has massive consequences, and it remains to be seen how the port workers will deal with the ship backlog and unload thousands of containers filled with various goods.

He believes the effect of the strike will be felt across supply chains in the coming weeks. Also, ships delayed on the U.S. East and Gulf Coasts will be late arriving back in the Far East.

This would affect schedules towards the end of 2024 and 2025 in the run-up to the Lunar New Year at the end of January, which usually witnesses an increase in goods shipped out of the Far East.

New Data from Xeneta shows that shippers have been hit by rising freight rates due to strikes.

The average spot rate on the most affected trade from North Europe to the U.S. East Coast stood at USD 2 900 per FEU on October 4, 2024, a rise of 58% since the end of August.

The trade from North Europe to the U.S. West Coast has also been affected. Average spot rates rose 48% in the same period and stand at USD 4 450 per FEU.

There have been warnings that the market will be challenging in the coming months.

Sand states that shippers are already facing a financial crisis due to rising freight rates on the transatlantic trades, and markets on other major trades out of the Far East are elevated due to the Red Sea conflict.

Though the strike ended, it is only a tentative agreement, and automation at ports can be a major block since automation is an issue that neither party can resolve in more than a year of negotiations.

Now, there are only 100 days to reach an agreement, or else the strike could begin again.

References: Xeneta, MHW Magazine

Global Supply Chains May Take Weeks To Recover After Workers’ Strike At U.S. Ports End appeared first on Marine Insight – The Maritime Industry Guide

Source: Maritime Shipping News