The looming East Coast port strike could send the container trade into 'chaos,' CEO warns

The disruptions could cost the U.S. economy more than $1 billion for each day a strike continues. - Photo: Mario Tama (Getty Images)
The disruptions could cost the U.S. economy more than $1 billion for each day a strike continues. - Photo: Mario Tama (Getty Images)

For the first time in decades, the largest union of maritime workers in North America is planning to go on strike, potentially disrupting supply chains and pushing the container trade into “chaos,” according to the CEO of Container xChange.

“The congestion and delays at these major ports will severely impact the availability of containers, increase costs, and disrupt schedules,” Christian Roeloffs, whose company works with more than 1,500 shipping companies, said in a Thursday advisory to customers.

The International Longshoremen’s Association (ILA)and its more than 85,000 dockworkers at over 100 East and Gulf Coast ports has threatened to go on strike as soon as Oct. 1. If they do walkout, it will be the first time since 1977.

The union is far from reaching a deal with the United States Maritime Alliance, which represents operators at more than a dozen major ports. On Thursday, the alliance filed an unfair labor practice charge and requested the National Labor Relations Board require the union resume bargaining. The White House on Thursday called for the parties to settle their differences and avert a strike.

Read more: A big U.S. port strike could soon shake the economy. Here’s what to know

Practically all industries will be impacted by a potential strike. Shipments of foreign fruit including pineapples, bananas, citrus, and grapes, which normally enter the U.S. through its eastern and Gulf coasts, could end up caught in the crosshairs if a strike does begin. Cars and pharmaceuticals would also face severe disruptions in getting goods to stores, which could lead to prices spiking across the country.

Grain exports are one of the rare exceptions, although other agricultural exports — like soybeans — would still be impacted. The disruptions could cost the U.S. economy more than $1 billion for each day a strike continues, while Oxford Economics has said a prolonged strike could impact up to 100,000 jobs.

“Businesses are acting now to reroute shipments and secure their container supply, or they risk being left stranded in a congested and costly aftermath,” Roeloffs said, noting that small traders “in particular’ may be squeezed.

MSC, a major shipping company, on Thursday said booking adjustments, including rolls to other vessels or cancellations, may be necessary, according to a travel advisory. It also said it reserves the right to not accept new refrigerated bookings at the affected ports if a strike breaks out, and urged customers to move product before Oct. 1.

Hapag-Lloyd plans to implement a “work interruption destination surcharge” for imports to the U.S. Gulf and East Coast. Maersk has issued a similar surcharge that will go into effect on Oct. 21, depending on the impact of the potential disruption to the supply chain. Another major player, CMA-GCM, on Sept. 17 announced a series of changes to its charges for the ports, which will come into effect on Oct. 11.

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