According to Lars Jensen, CEO of Vespucci Maritime, the U.S. East and Gulf Coast port strike that took place in early October, will reduce capacity on certain trade routes and could disrupt cargo frontloading ahead of another potential work stoppage in January. Although the strike was brief, Jensen warned that its ripple effects will continue through mid-November.
Repercussions from the three-day work stoppage will manifest in a cascading timeline. Jensen shared data showing capacity on the Asia–U.S. East Coast trade lane will drop by -17% in the week starting November 11. On the Trans-Atlantic trade lane, shipments from Europe will reduce by -15% in the week starting November 28. As a result, two weeks after the stoppage, Trans-Atlantic shipments returning to Europe will experience delayed arrivals which will affect export capacity. Delays will affect Latin American exports in three to four weeks and Asia exports after five to six weeks. Carriers have also shared concerns over equipment shortages and schedule impacts.
Jensen noted that mid-November could be a turning point for when the effects of the October strike might ease. However, if the International Longshoremen’s Association (ILA) and the U.S. Maritime Alliance (USMX) fail to reach a new labor agreement before their January 15 deadline, a new labor dispute could trigger a rush of cargo to the U.S., straining available capacity.
The threat of potential tariff increases after the U.S. presidential election could also bring another wave of cargo volumes. “Again, working backwards, that would mean a surge in export cargo out of Asia,” Jensen said. “Just like when we had an early peak season [in the U.S.] in the summer, we’re going to have an early peak season ahead of [Lunar New Year.],” Jensen pointed out.
Source: Journal of Commerce
This website uses cookies so that we can provide you with the best user experience possible. Cookie information is stored in your browser and performs functions such as recognising you when you return to our website and helping our team to understand which sections of the website you find most interesting and useful.