With the East and Gulf Coast labor contract expiring today, the industry is preparing for a coast-wide port strike effective tomorrow, October 1. Container ports are expected to cease operations late Monday, barring a last-minute agreement. We anticipate significant delays and congestion, even if the strike lasts only a few days. The duration of work stoppage is unknown; it could be days, or it could be prolonged. We are watching closely for updates and will pass them along as received.
Terminals have prepared by offering extended gate hours to allow shippers to out-gate as much cargo as possible prior to the work stoppage. Ocean carriers have announced a variety of surcharges in anticipation of major congestion, with effective dates throughout October, ranging from $1000-3000 per container, applicable on import and export lanes via the impacted ports. Some carriers have stopped accepting new export bookings. The Federal Maritime Commission has issued guidance reminding carriers and marine terminal operators that the existing regulations on freight, surcharges, detention, and demurrage will be applicable in the event of a strike.
The impacts of Hurricane Helene are being felt along its path from Florida through North Carolina. Many typical truck and rail routings are impassible, and we expect transportation delays in the affected areas to persist for some time.
In Canada, dock workers at the Port of Montreal today have started a three-day strike that will shut down operations at two terminals. This additional East Coast labor action will further contribute to North America supply chain delays expected over the coming weeks.
In China, the annual Golden Week holiday also begins this week, closing factories and offices through October 7. Ocean carriers on Asia trades have announced blank sailings for the weeks ahead in anticipation of slower demand and schedule disruption from various labor actions.
Ocean freight rates on the major import trades remain relatively flat ahead of the strike, and it’s not yet clear how a work stoppage will impact freight rates in October and beyond.
For urgent shipments that typically move via EC/GC ports, we recommend utilizing air freight options when possible. Routings via West Coast ports are also available, though those gateways are expected to be inundated with cargo. Rail dwell times from WC ports to inland points are already significant and likely to increase. Transloading and trucking from WC ports is recommended as a rail alternative.
We will provide updates as they become available.
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Rachel Shames
VP, Pricing & Procurement
CV International, Inc.