Alert: Potential Disruptions at US East and Gulf Coast Ports Amid Upcoming Strikes
With the possibility of a port worker strike looming on the US East and Gulf Coasts, logistics professionals and supply chain managers should be preparing for potential disruptions in October 2024. DB Schenker is closely monitoring the situation and providing updates to help you navigate the potential challenges ahead.
Latest Developments in Negotiations
As of now, contract negotiations between the International Longshoremen’s Association (ILA) and the United States Maritime Alliance (USMX) have reached a critical stage. The ILA, representing over 45,000 union members across the US East and Gulf Coasts, has signaled the possibility of a coast-wide strike if no agreement is reached by the expiration of the current contract on 30 September 2024.
Recent updates indicate that while mediation has been initiated, delays in negotiations are likely, leaving uncertainty around port operations come October.
How Could a Strike Impact Port Operations?
If the strike proceeds, the operational impact will vary depending on its scale. It remains unclear whether all East and Gulf Coast ports will be affected or if strikes will occur at select locations. Ports such as New York, Savannah, and Charleston are key players in international logistics, handling significant volumes of goods.
- Potential Blocked TEU Volumes: During the month of October, these ports typically handle approximately 1 million TEUs combined. A disruption could block this volume, causing delays and extended congestion.
- Carrier Responses: Carriers are expected to continue services but may introduce blank sailings, particularly on Transpacific and Transatlantic routes. Freight rates may rise due to reduced capacity, and container free time could be cut short, leading to further challenges.
- Commodities: Industries reliant on timely imports, such as automotive, healthcare, and retail, may face significant disruptions. Seasonal retail goods, which are already in transit, are less likely to be affected, but non-seasonal commodities will experience delays.
Steps to Mitigate Potential Disruptions
While many large-scale supply chain adjustments may be difficult to implement at this stage, DB Schenker advises businesses to consider the following options to reduce the potential impact:
- Port Diversion Options: Pacific, Canadian, and Mexican Ports
In the event of a strike, DB Schenker is prepared to help customers reroute shipments through alternative ports to ensure supply chain continuity. For cargo originally destined for East and Gulf Coast ports, shippers can leverage our Pacific coast port services, including the highly capable ports of Los Angeles, Long Beach, and Seattle. These ports offer a strategic advantage by connecting to vital rail and trucking networks that can reach inland destinations across the U.S.
Additionally, DB Schenker offers services at key ports in Canada and Mexico, such as Montreal, Halifax, Vancouver, Altamira, Veracruz, and Ensenada, which can serve as effective alternatives for diverting cargo. Canadian ports have the infrastructure to manage increased volumes, while Mexico provides additional flexibility through cross-border transport to the U.S. These options enable customers to avoid congestion and potential delays at U.S. ports affected by strikes.
- Transloading and Cross-Border Services
DB Schenker’s transloading services will be critical in maintaining supply chain efficiency during potential disruptions. Our transloading solutions enable cargo to be quickly offloaded from one mode of transport (ship) and onto another (truck or rail) at alternative ports, ensuring rapid movement inland. This process is particularly beneficial when rerouting through West Coast or Canadian ports, allowing for a seamless shift in transportation methods to reach final destinations in the U.S.
For businesses with supply chain networks that span North America, our cross-border services between Canada, Mexico, and the U.S. provide a key advantage. DB Schenker can facilitate the movement of goods across borders with minimal delays, ensuring that time-sensitive shipments continue to reach their destinations even as labor negotiations affect U.S. ports.
Preparing for the Worst: Steps to Take Now
- Assess Your Current Cargo Routing: Determine which shipments may be affected by potential strikes and work with DB Schenker to identify suitable diversion options through alternative ports.
- Leverage Transloading and Cross-Border Solutions: With our transloading services and cross-border transport options, shippers can expedite cargo movements and ensure goods remain in transit even if East and Gulf Coast ports experience delays.
- Consider Airfreight for Critical Shipments: In the event of a prolonged strike, airfreight may be a viable alternative for high-priority goods. DB Schenker offers global airfreight services that can help alleviate the pressure caused by port disruptions.
- Utilize DB Schenker’s End-to-End Supply Chain Management Solutions: From ocean freight to last-mile delivery, our suite of services can help you navigate through complex logistical challenges.
Stay Updated
For up-to-date information on port statuses, strike developments, and alternative shipping options, stay connected with DB Schenker on LinkedIn: DB Schenker LinkedIn Page.
Our team is committed to providing support and insight to help you navigate potential disruptions and keep your supply chain running smoothly.