Companies Prepare for Fallout from East Coast Port Strike
Disruptive strike actions have begun at major U.S. ports on the East and Gulf Coasts such as New York-New Jersey, Savannah, and Houston, exposing ports across the United States to work stoppages, shipping and cargo processing delays, and worsening backlogs. Three main scenarios could unfold.
The clock has run out on an agreement that could have prevented worker strikes at East Coast and Gulf Coast ports and will leave shippers and West Coast ports adjusting to the fallout.
A summer-long standoff between the International Longshoremen’s Association (ILA) and the U.S. Maritime Alliance (USMX) yielded no progress, which has led to a work will stoppage at ports such as New York-New Jersey, Savannah, Houston, and points in between after the current contract expired on Sept. 30.
President Joe Biden has said he will not invoke Taft-Hartley Act provisions to intervene in the strike despite the economic impact a strike would have shortly before the presidential election. Other potential means of mediating the dispute, such as the intervention by Labor Secretary Julie Su during the 2022-2023 West Coast port strikes, have so far not emerged.
The extent of disruptions resulting from a strike is uncertain, but there are currently three possible outcomes.
No Strike. Traffic at ports will remain unchanged, though there may be some minor disruptions.
Work-to-Rule. Workers doing the bare minimum required by their contract will slow down operations and could lead to sporadic disruptions and unexpected walkouts. The resulting longer wait queues could prompt shippers to choose West Coast alternatives.
Full-Scale Strike. A complete work stoppage would strangle shipping on the East and Gulf coasts, with heavy congestion, longer vessel queues and container backlogs, and knock-on congestion at West Coast and Canadian ports as shippers opt for alternate routes.
Customers Can Anticipate the Impact
Shipping customers need to prepare for the impact of a strike and any related developments, as they may need to divert shipments or, in some cases, make a temporary switch to air freight. Tools are available that can help make their response more seamless.
An automated risk management tool that issues alerts would be helpful in tracking the labor negotiations, or any other new developments, such as if West Coast workers walked out in solidarity—though no such move is currently planned. The tool could also make customers aware of any delays at West Coast ports caused by increased traffic. A real-time shipment visibility tool can help companies visualize a strike’s impact throughout their supply chains, help them predict delivery times, choose the most viable options for maintaining delivery schedules and issue alerts to their own customers.
With a strike looming, companies that rely on maritime shipments will most likely experience significant disruptions. But those who are best prepared can limit that impact and better weather the coming storm.
Daily count of waiting cargo vessels outside major North American ports, 2024 (source: Everstream Analytics)