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US East Coast dockworker strike: Temporary resolution but risks remain for January

Oct 4, 2024 | , , , , , , , , , , , , ,

While a tentative agreement between the International Longshoremen’s Association (ILA) and the United States Maritime Alliance (USMX) has paused the strike, a final resolution must be reached in January 2025, or further disruption could occur.

The recent US East and Gulf Coast dockworker strike, which began on 1st October 2024 and lasted three days, caused significant disruptions across 36 key ports, including New York, Savannah, and Houston.

During the strike, over 50 vessels were anchored offshore, impacting approximately 1.4% of the global container shipping fleet. Carriers including CMA CGM, ONE, and APL declared force majeure, leading to potential rerouting, delays, and added costs for shippers. This has highlighted the importance of securing comprehensive marine insurance to mitigate risks such as unexpected storage costs, rerouting, and delays.

Though some cargo was rerouted to alternative ports in Canada and Mexico, these measures provided limited relief due to limited capacity and congestion at those facilities.

With another 100 vessels en-route the length of time required to clear the backlog remains uncertain, and the resulting congestion could persist well into Q4. Additionally, carrier surcharges are expected to remain in place on all cargo to and from the US, further increasing costs for shippers.

If the ILA and USMX fail to reach a final agreement by January, the resumption of the strike could lead to significant global supply chain disruptions. Nearly 50 vessels were affected during the initial strike, and this number could rise, with an estimated 2.22 million TEU of cargo capacity tied up by the end of the month if no resolution is found

To discuss the current situation and how Metro can protect your supply chain, please EMAILAndrew Smith, Chief Commercial Officer.

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US East coast port strikes underway

Oct 2, 2024 | , , , , , , , , , ,

At 12:01 a.m. ET on Tuesday 1st October 2024, dockworkers along the US East and Gulf Coasts began a major strike, marking the first significant work stoppage in nearly 50 years, threatening major supply chain disruption across the US and beyond.

Nearly 50,000 members of the International Longshoremen’s Association (ILA) have walked out, grinding operations at 36 key ports, threatening to unleash significant supply chain disruption, severely delaying both imports and exports.

Affected ports on the East Coast and Gulf of the US include Boston, New York/New Jersey, Philadelphia, Wilmington, Baltimore, Norfolk, Charleston, Savannah, Jacksonville, Tampa, Miami, Port Everglades, New Orleans, Mobile and Houston.

The strike comes after negotiations between the ILA and the United States Maritime Alliance (USMX) broke down, with the union rejecting USMX’s latest offer of a nearly 50% wage increase over a six-year period. The ILA has remained firm in its demands, pushing for higher pay and stronger job security guarantees in response to the automation plans that threaten longshoremen jobs.

With goods sitting idle in containers as ships pile up offshore and the potential for shortages high, particularly for perishable goods. Industrial materials are also caught in the disruption, impacting businesses reliant on components and raw materials to keep production lines running.

Shippers who depend on steady supply flows in the lead-up to the critical holiday season, have implemented contingency plans, with some shipping orders ahead of the strike to avoid delays. Some shippers may opt to move goods through other ports, but such measures could come at an additional expense and many businesses may struggle to find alternatives, especially as other ports lack the capacity to absorb redirected cargo.

Shipping lines and port operators have responded by activating emergency plans, rerouting ships where possible, anchoring to wait out the strike and issuing surcharges to cover additional costs. Emergency Operations Surcharges for shipments to the affected ports have already been introduced, with fees ranging from $800 to $3,000 per container, depending on size and carrier.

Most carriers and terminals have stopped demurrage and detention accrual – but that relief does not extend to cargo already accumulating charges.

Despite calls from industry leaders for government intervention, the Biden administration has signalled it will not invoke the Taft-Hartley Act, which could enforce an 80-day cooling-off period.

Both sides of the dispute remain far apart and the union’s president, Harold Daggett, has made it clear that the ILA is prepared to strike for as long as necessary to secure an agreement that addresses their concerns.

Looking ahead
With Sea-Intelligence calculating that it would take six days to clear the backlog from one day of strike action, it could quickly lead to significant logistical challenges and the likelihood of severe backlogs is growing.

Container bottlenecks, equipment shortages, and soaring costs for trucking and rail services are becoming inevitable as the strike enters its second day, with no clear resolution in sight.

The longer the strike continues, the greater the risk of long-term disruptions to global supply chains reliant on US ports.

We have contingency plans in place to avoid the ports affected by strikes, as well as alternative routes and entry points.

To discuss the current situation and how Metro can protect your supply chain, please EMAIL Andrew Smith, Chief Commercial Officer.

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Stricter air cargo security measures in response to rising threats

Sep 17, 2024 | , , , , , , ,

The US and Canada have introduced new security measures aimed at addressing the potential risks posed by incendiary devices found in European parcel networks.

Recent incidents, including a fire at a logistics hub in Leipzig originating from a Baltic package, have heightened awareness of potential threats to global supply chains, with reports suggesting possible interference by Russian actors.

The US Transportation Security Administration (TSA) and Transport Canada have implemented stricter security protocols, adding layers of scrutiny to air cargo entering their respective countries. 

These measures, introduced in August and early September, focus on cargo originating from Europe, the Commonwealth of Independent States (CIS), and Central Asia. Air carriers must now provide more detailed information on shippers and consignees to mitigate risks.

Transport Canada’s new rules require that cargo from 55 European and Central Asian countries must come from shippers with an “established business relationship” with freight forwarders or air carriers.

Air Canada Cargo, in line with these measures, has mandated specific messaging on air waybills to confirm the relationship between shippers and their logistics partners. To meet the security standards, shippers must have maintained an active account for at least 90 days, with a minimum of six shipments during that period.

Similarly, the US has introduced “Enhanced ACAS Security Filing,” requiring additional data on the shippers of all goods entering the country. This enhanced scrutiny aims to better identify parties involved in the supply chain before cargo is loaded onto US-bound aircraft. As part of these emergency measures, air carriers can only transport cargo from Europe and CIS countries if it has been tendered by a “Known Consignor” or a shipper with an established business relationship with a regulated agent or carrier.

These new regulations have not come without challenges. Several carriers, including Korean Air Cargo, have imposed temporary embargoes on cargo originating from Europe and the CIS regions due to the difficulties in meeting the updated requirements. The embargoes are set to remain in place until mid-November, with further assessments to follow as the new security rules settle into effect.

Metro’s air exports to North America continue to fly without issue, or delay. Inbound consignments are processed through customs and associated border agencies by our network partners in the US and Canada.

EMAIL Elliot Carlile, Operations Director, for insights, prices and advice. 

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US East coast port strike looms as White House declines plea to step in

Sep 17, 2024 | , , , , ,

Ocean carriers and port employers are urging the International Longshoremen’s Association (ILA) to return to contract negotiations in an effort to avoid a potential strike across East and Gulf Coast ports, as the White House rejects plea by 177 trade associations to use legal powers. 

A strike at U.S. East and Gulf Coast ports appears imminent after the White House confirmed it won’t intervene legally. Following a letter from 177 trade associations urging action if negotiations with the ILA stall, the terminal employers’ group, USMX, welcomed the call for the government to help resume talks.

Trade groups warned a strike would harm the economy, especially with inflation falling. Despite USMX’s disappointment over stalled negotiations, the White House ruled out using the Taft-Hartley Act to delay the strike, encouraging both parties to negotiate.

The ILA rejected the latest wage offer from the USMX, considering it insufficient, particularly due to the unpredictable working hours of longshore work. The union is also pushing for stricter prohibitions on automation, demanding a ban on both semi-automation and full automation at marine terminals.

In addition to automation, the ILA raised concerns about the use of surveillance equipment, such as in-equipment cameras, which they claim infringes on worker privacy. They argue that this technology contributes to a hostile work environment, particularly affecting female longshore workers.

As the strike threat looms, transatlantic shipping rates are experiencing an unexpected surge, surpassing February’s peak. While many east-west container trade routes have seen declining rates, the North Europe to US East Coast trade route has bucked the trend, with a 16% increase in rates week-on-week.

There was speculation that the impending strike contributed to the rate spike, with European shippers rushing to move goods ahead of the 1st October deadline. However, much of the price rise can be attributed to peak season surcharges implemented by carriers at the beginning of September.

MSC has already announced plans to impose an Emergency Operations Surcharge from the start of October, further driving up rates. Shipping analysts suggest that even if the strike is short-lived, lasting around a week before government intervention, the ripple effects will push rates higher and create significant disruption for shippers across the Atlantic.

We have contingency plans in place to avoid the ports likely to be most affected by strikes, as well as alternative routes and entry points.

To discuss these issues and how Metro can protect your supply chain, please EMAIL Andrew Smith, Chief Commercial Officer.

Category: United States

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