Attention! Port congestion in coming weeks!
The longshoremen strike at ports along the East Coast and Gulf Coast of the United States has finally ended.
The strike began on October 1 and lasted for three days. With the gradual restart of terminal operations on October 4, the American East and American Bay ports are expected to have the busiest weeks in their history.
Although the strike ended earlier than investors expected, it will take time to clear the backlog of cargo at the port, and the impact will continue to be felt.
At least 54 container ships lined up outside the port during the strike, according to Everstream Analytics, affecting the unloading of goods ranging from bananas to auto parts, with more ships expected to follow.
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Peter Sand, principal analyst at Xeneta, noted that it can take two to three weeks to resume normal cargo flow, and the challenge for ports is not only to deal with the ships already in the queue, but also how to efficiently eliminate congestion in order to restart the supply chain.
According to Vizion API data, the most affected company is Walmart, which has containers in ports on both the East Coast and the Gulf Coast, with 837.2TEU in port and an average stay of more than 10 days.
The second most affected was Kuhn + Nagel, with an average stay of more than 16 days. DHL Global Express has only 293TEU in port, with an average stay time of 37 days, although containers are less affected, but the stay time is longer.
Companies like IKEA and Home Depot also rely on East Coast and Gulf Coast ports.
While most retailers said they had stocked up ahead of time and the short strike would not have a major impact on the availability of holiday products, prices for items such as coffee rose because of the strike, showing the fragility of the supply chain.
The International Longshoremen's Association (ILA) and the United States Maritime Union (USMX) announced a wage agreement late Thursday that will raise the average hourly wage for workers from $39 to $63, an increase of about 62%. While the increase is slightly less than the 77 percent the union had previously demanded, it has received preliminary approval from ILA members.
The walkout by 45,000 workers affected 36 ports from Maine to Texas, and J.P. Morgan analysts estimated the cost to the U.S. economy at about $5 billion a day.
Although the tentative agreement ended the strike, the contract was only extended until Jan. 15, and the two sides still need to continue negotiations on issues such as the use of automation.
The move is intended to provide a buffer period for both sides to return to the negotiating table and continue in-depth discussions on all other outstanding issues. The agreement takes effect immediately from the date of publication.
The National Retail Federation said reaching a final deal sooner rather than later is good news for the entire national economy.
U.S. President Joe Biden praised the two sides for reaching an agreement to reopen the port, noting that this preliminary agreement represents a critical step toward a strong contract. He thanked union workers, container companies and port operators for their patriotic actions.
