There's going to be a strike at the eastern ports, and it's going to be serious
The cooperation agreement between the International Labor Association (ILA), the US East Coast port workers' union, and the US Maritime Union (USMX), a terminal management organization, expires on September 30, and the ILA has made it clear that it will launch strike action from October 1 if a new agreement is not reached.
In the face of this potential industrial conflict, Danish shipping data analysis company Sea-Intelligence stressed in its latest report that it is crucial to assess its impact on actual container traffic and the time it will take to recover after the strike ends.
Based on historical data, the company forecasts that U.S. East Coast ports will handle 2.3 million TEUs in October and handle 74,000 TEUs per day, of which 36,000 TEUs are imported and 38,000 are exported. In particular, in the event of a strike, about 20,000TEU of empty container loading per day will be blocked.
Once the strike is over, this backlog of containers will need to be handled in addition to normal operating volumes. Sea-Intelligence assesses the ability to clear these backlogs by analyzing excess capacity at East Coast ports, which refers to the portion of the port that is actually handling more than expected. The agency estimates that the port system has the capacity to increase its handling capacity by 13 percent, compared with a forecast of 2.3 million TEUs handled in October.
Further analysis shows that if the port's capacity exceeds 13 percent of its expected normal flow in October, a one-day strike would take about six days to clear the backlog of 74,000 TEUs. If the available capacity of the port is more adequate, the clearance time may be reduced to four to five days.
Alan Murphy, CEO of Sea-Intelligence, pointed out that if a week-long strike occurs in early October, the impact may last until mid-November to gradually ease; If the strike lasts two weeks, it could take until 2025 for port operations to fully return to normal. The forecast highlights the severe impact a strike could have on global supply chains.
Maersk also said in an update that any shutdown, regardless of its size, could have a profound impact on the supply chain. In particular, a complete shutdown in the Gulf of Mexico and the East Coast of the United States, even if it lasts only one week, may take up to four to six weeks to return to normal operations, and during this period, a large backlog of goods and transportation delays will continue to accumulate, further increasing the pressure on the supply chain.
Maersk is fully prepared to deal with the potential risk of disruption and is committed to actively assisting customers in exploring alternative transport routes, modes of transport and distribution options to minimize the impact on customers' supply chains. At the same time, Maersk encourages all customers to maintain close communication with their representatives to jointly assess supply chain needs and, if necessary, develop personalized contingency plans to address the various challenges that may arise.
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