The impact of the strike may continue throughout the year, and shippers are preparing for a new round of strikes
Although the strike on the East Coast of the United States was short, lasting only three days, the underlying deep-seated conflict related to port automation was not fundamentally resolved, but was postponed until January 15, 2025. The strike not only directly affected the current operation, but also had a profound impact on the subsequent market dynamics.
During the strike, a large number of ships were forced to anchor outside U.S. ports, by one count as many as 63, which directly caused ships to be unable to carry out scheduled shipments, and also affected the capacity of the port of origin. Considering the congestion of ships and cargo, it is expected to take 2-3 weeks to fully return to normal operations.
The impact is not limited to the East coast of the United States, but also to transatlantic routes. From Europe, there are usually 23 flights a week between Europe and the East Coast of the United States, and the transit time from the East Coast of the United States back to Europe is about 2 weeks. This means that container shipping capacity from Europe to the East Coast of the United States will be reduced in mid-October.
In essence, a half-week delay in berthing means that half of the capacity originally expected to be available in Europe after 2 weeks will not be delivered on time, but will only be delayed. As a result, the market capacity on westbound transatlantic routes will be reduced by about 10-15% this week.
In addition, due to differences in sailing distance and operational recovery time, capacity in other regions such as South America and the Far East will also be affected to varying degrees, but the impact will be more dispersed and delayed. In South America, this will happen in the second half of October; In the Far East, capacity declines are expected around mid-November.
In the face of this situation, shippers need to adopt proactive risk management measures to reduce the risk of possible future strikes. Consider shipping to an alternative route via the West Coast of the United States or timely delivery through an East Coast port by January 15. For shipments originating in Asia, this means loading exports by the end of November at the latest. At the same time, some shippers are preparing for a strike in advance (as they did for the 2024 summer peak season). Therefore, shippers also need to pay close attention to market dynamics and make reasonable transportation plans to avoid being affected by future market fluctuations.
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For shipping companies, they also need to pay attention to market dynamics and changes in demand from shippers. If carriers are really worried about a new strike, there should be an unusual surge in orders from Asia to the US East in the second half of November. From Latin America, it will be the first half of December, while from Europe, exports may see a surge in the second half of December. This surge not only reflects shippers' concerns about future market volatility, but also reflects shippers' strategic adjustments in risk management.
Overall, the strike on the East Coast of the United States is over, but its impact on the global shipping market will continue for some time. Shippers and carriers need to pay close attention to market dynamics and develop reasonable risk management strategies and transportation plans to cope with possible future challenges. At the same time, it is also necessary to actively seek ways to resolve deep-seated conflicts in order to promote the long-term stable development of the shipping market.
