U.S. East and Gulf Coast ports currently handle 43% of all U.S. imports and employ approximately 45,000 port workers. Six of the nation’s ten busiest ports are located in these regions, underscoring the critical role they play in the U.S. supply chain. Should the strike occur, logistics experts predict that for every week of disruption, it would take an additional 4-5 weeks to return to normal operations.

Rerouting shipments to the West Coast would cause significant delays and increased freight charges due to the surge in volume, compounded by the limited number of vessels capable of passing through the Panama Canal daily. Although routing shipments through Canada could potentially help alleviate some of the burden, current restrictions present multiple hurdles and any relaxation of these restrictions remains uncertain.

If the strike proceeds, possible options to reduce the impact could include the following:

• Store household goods (HHGs) at the origin until the strike is resolved to avoid transit delays
• Increase air shipment allowances to help mitigate the immediate impact of slowed sea freight
• Plan ahead by assessing the need for rental furniture at the destination, as there may be longer lead times for delivery
• Prepare for delays and increased costs that may come as a result of rerouting shipments

With just a week to go until the potential east and Gulf Coast port strike is set to commence on October 1, a few key developments have occurred since our previous update.

Talks between the ILA and USMX remained unproductive with no progress on the key sticking points of compensation and automation job protection, leading industry experts to believe that a strike now looks certain. As the situation potential moves from a possibility to a probability, we have seen some clients opting for approval of larger air shipments and choosing to keep goods at their origin until more is known.

The government can invoke the 1947 Taft-Hartley Act, under which, if determined that a port strike could endanger national health or safety, the U.S. president can request a court order with a mandated 80-day cooling-off period. During this time, work and negotiations would continue. However, while 177 trade associations have urged government intervention if negotiations don’t resume, the White House has said it would not invoke legal powers to intervene, and instead, it encourages both parties to remain at the bargaining table and negotiate in good faith.

Some shipping lines have announced ocean freight emergency and/or work disruption surcharges if the strike takes place, with some charges beginning the first day of strike action.

Proposed charges being seen by the industry include forewarning fees to take affect mid-October at:

• 20′ container (6K lbs): $1,000-$1,500
• 40′ container (12.5K lbs): $2,000-$3,000

MSC, a Switzerland-based carrier, notified customers on September 1—in accordance with a 30-day advance warning from U.S. Federal Maritime Regulation mandate—that beginning October 1, it would apply a $1,000/20′ container and $1,500/40′ container emergency surcharge on all shipments from Europe to the U.S. east and Gulf coasts, as well as to ports in the Caribbean, Mexico, and Canada.

Hapag-Lloyd, a Germany-based carrier, announced a similar work disruption surcharge of $1,000/20′ container from October 18 on container shipments to the U.S. east and Gulf coasts.

Analysts have estimated that a one-day strike could take anywhere from four to six days to clear the backlog. With that in mind, expectations are that if a strike lasts a week, it could be a good 4-5 weeks to return to normal operations.

Furthermore, due to the compounding nature of the delays, a strike lasting two weeks could mean that ports would not return to normal operations until 2025.

Industry suppliers are looking at each shipment and investigating the best options on a case-by-case basis. Forwarders are investigating routing shipments via the Panama canal, weighing the impact on transit time and costs. Previous cost analysis research has estimated double the cost of the shipment, as well as extended transit time by more than three weeks (though this range could likely extend further should the strike occur).

Goods originating in EMEA or APAC and shipped to the U.S. via Canada would require customs clearance for two countries, which makes this the historically less-used option. Movers also anticipate significant backlog concerns should this routing be utilized. However, Canada is now being actively researched as a potential route due to limited alternate options. Please note that Canada does not allow used items (such as corporate household goods) originating from the U.S. to be routed through their territory.

The International Longshoreman’s Association began their strike at 12:01 a.m. EDT on October 1 for all seaports from Maine to Texas, which typically handle 60% of US imports. More than 45,000 dockworkers are striking over wages and benefits, as well as automation concerns.

It is estimated that for each day the ports are inoperable, recovery time will be one week. A one-week strike could take 4 to 5 weeks to return to normal, and a longer strike (for example, three weeks) would take us into 2025 before normalcy resumes.

• Many shipping carriers have advised they are implementing Work Disruption Surcharges. These fees range from $1,000 to $3,000, depending on container size.
• Warehousing and drayage rates are expected to rise due to increased demand for alternative routes and port services.
• Trucking and rail will be heavily impacted and could lead to higher costs and longer delays. Contingency routes, such as the U.S. West Coast and Canada, could be overwhelmed quickly and are being carefully weighed as options.

The ILA agreed to a new wage offer on the afternoon of Thursday, October 3 and will suspend strike action at East and Gulf coast ports. The ILA said that union members will go back to work, extend the current master contract until January 15, 2025, and return to the bargaining table to negotiate outstanding issues.

It’s been estimated that each day of strike action will require 4 to 6 days to resume normal operations. The backlog that has accumulated since the ports closed on Tuesday, October 1 will take some time to clear.

Altair Global will continue to provide updates on all impacted shipments.