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Possible US seaport strike could back up goods for months, shipping experts say
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Possible US seaport strike could back up goods for months, shipping experts say
Aug 14, 2024 11:46 AM

LOS ANGELES, Aug 14 (Reuters) - A potential strike at

U.S. seaports on the East Coast and Gulf of Mexico could back up

cargo there for weeks or even months, shipping experts said on

Wednesday.

Retailers like Walmart ( WMT ) and other importers have been

rushing goods in ahead of the Sept. 30 expiration of the union

contract covering some 45,000 dockworkers at three dozen

seaports from Texas to Maine.

Their goal? To land cargo in the U.S. before Oct. 1, when

the International Longshoremen's Association representing those

workers has vowed to strike if a new contract is not in place.

Analysts at Sea-Intelligence, a Copenhagen-based shipping

advisory firm, estimated that it could take anywhere from four

to six days to clear the backlog from a one-day strike.

"This means that a (one)-week strike in the beginning of

October would not be cleared until mid-November,"

Sea-Intelligence CEO Alan Murphy said in a statement.

A two-week strike could mean that ports would not return to

normal operations until 2025, Murphy said.

Those findings echo an advisory from A.P. Moller-Maersk

, one of the largest providers of ocean

transportation. Maersk said a one-week shutdown could require up

to six weeks of recovery time, "with significant backlogs and

delays compounding with each passing day."

The early shipping strategy has come with a hefty cost to

shippers. The off-contract spot market price to send a 40-foot

container to the U.S. East Coast from the Far East topped

$10,000 in early July, up from around $2,100 in early April,

said Peter Sand, chief analyst at pricing platform Xeneta.

"The risk of port strikes was something that had to be

dealt with - by taking early action," Sand said.

That window is closing as the deadline for a new deal nears.

That's because shipping diversions due to attacks by Yemen's

Houthis in the Red Sea means it can take 45 days or longer to

transport goods to East and Gulf Coast ports from factories in

Asia.

"Shipping cargoes next week ... is really too late - as it

may just be sitting on the water" if the ports are hit by

widespread strikes, Sand said.

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