Exclusive: Potential Strike at U.S. Seaports Could Cause Weeks-Long Backlog, Experts Warn
By Lisa Baertlein
LOS ANGELES (Multibagger) - A looming strike at U.S. seaports on the East Coast and Gulf of Mexico could lead to significant cargo delays, experts caution.
Retail giants like Walmart and other importers are racing against the clock to bring in goods before the Sept. 30 deadline, when the union contract for 45,000 dockworkers at three dozen seaports from Texas to Maine expires.
The International Longshoremen's Association has threatened to strike if a new contract is not reached by Oct. 1, potentially causing major disruptions in cargo movement.
Sea-Intelligence analysts estimate that a one-week strike could result in a backlog lasting until mid-November, while a two-week strike may not see ports return to normal operations until 2025.
Major shipping provider A.P. Moller-Maersk warns that even a one-week shutdown could lead to up to six weeks of recovery time, with significant delays and backlogs.
The rush to ship goods early has come at a high cost, with spot market prices for sending containers from the Far East to the U.S. East Coast skyrocketing to over $10,000, up from $2,100 in early April 2023.
As the deadline for a new contract approaches, the window for taking early action to mitigate the impacts of a potential strike is closing rapidly.
Shipping diversions due to external factors like attacks in the Red Sea mean that delays in transporting goods to East and Gulf Coast ports from Asia can stretch to 45 days or more.
Experts advise that waiting until the last minute to ship cargo could result in goods being stranded at sea if widespread strikes occur.
In conclusion, the potential strike at U.S. seaports poses a significant risk to the flow of goods and could have lasting impacts on supply chains and shipping costs. It is crucial for importers and retailers to plan ahead and take proactive measures to mitigate the potential disruptions in the coming weeks.