According to transport industry experts, the upcoming strike at key U.S. ports on the East Coast and Gulf of Mexico is alarming about potential cargo delays that could take weeks or months. Retail giants such as Walmart (NYSE:WMT) are among the importers that are accelerating their shipments, waiting for the September 30 deadline, when about 45,000 dockworkers could leave work.
The International Port Workers' Association, which represents these workers, has stated that it is ready to go on strike from October 1 if negotiations for a new contract fail. Analysts at Sea-Intelligence, a Copenhagen-based maritime consulting firm, warned that even a one-day strike could create a pile-up that would take four to six days to clear up. According to Sea-Intelligence CEO Alan Murphy, a week-long strike in early October could cause disruptions to continue until mid-November.
Murphy also said a two-week strike could disrupt port operations by 2025. This assessment is supported by maritime giant A.P. Moller-Maersk. A.P. Moller-Maersk noted that a one-week pause may require up to six weeks for recovery, and delays have the potential to increase every day the strike continues.
The urgency of transporting goods ahead of the strike led to a sharp increase in transport costs. Peter Sand, Xeneta ⁇ 's chief analyst, reported that the spot market price for a 40-foot container from the Far East to the East Coast of the USA rose above $10,000 in early July and rose significantly from around $2,100 in early April. Sand stressed that the risk of port strikes requires transporters to act early and decisively.
However, as the expiration date of the contract approaches, the opportunity for preventive shipments also decreases. In addition, shipping deviations caused by Houthi attacks in the Red Sea extended shipping times from Asian factories to East and Gulf Coast ports by 45 days or more. Considering this situation, Sand warned that sending cargo next week could be in vain, as goods could be stranded at sea if the strike takes place.
Reuters contributed to this article.
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