Sand: Ships en route to East Coast will have to wait at anchor until strike ends

Ships currently en route to US east and gulf coast ports will be unable to divert and will likely anchor offshore, awaiting resolution of the ongoing labour strike, Peter Sand, Chief Shipping Analyst at Xeneta, explained. Given their position at sea, turning back or rerouting to alternative destinations, such as US west coast ports, is impractical.

“These ships cannot turn back and they cannot realistically re-route to the US west coast. Some may divert to ports in Canada or even Mexico east coast, but the vast majority will simply wait outside affected ports until the workers return,” Sand said.

As reported earlier today, the International Longshoremen’s Association (ILA) has launched a coast-wide shutdown of ports from Maine to Texas at 12:01 a.m. (ET) on Tuesday, October 1, 2024. Tens of thousands of ILA members set up picket lines at critical waterfront facilities across the Atlantic and Gulf coasts, marking the first major strike of this scale in nearly five decades. This action followed the union’s rejection of the United States Maritime Alliance’s (USMX) final contract offer on Monday.

“The consequences will be severe, not only through congestion at US ports, but importantly these ships will be delayed returning to the Far East for the next voyage. A strike lasting just one week will impact schedules for ships leaving the Far East on voyages to the US in late December and throughout January.”

“More than 40% of total containerised goods enter the US through ports on the east coast and gulf coast, so the stakes could not be higher,” Sand said.

“To stop trade entering the US on such a large-scale, even for a short period of time, is highly damaging to the economy so government intervention will be needed to bring the matter to a resolution for the good of the nation.”

Sand said in a comment for WorldCargo News that shippers are already looking towards the US west coast ports as an alternative as they begin to see this strike lasting for more than 1 day. He added that Xeneta spot rates on the route from North Europe are already up by 30% this morning – a clear indication that a disruption like this comes at high and immediate costs. Sand expects the work stoppage to last for at least a week.

The unions have warned against governmental intervention in the strike, stressing that ordering workers to return to work without addressing underlying issues may lead to decreased morale and commitment, as was as low productivity levels, crippling the ports. The Biden administration has said that it does not plan to intervene in the talks.

Speaking on the impact of the strike, Port of LA CEO, Gene Seroka, said the timing of the strike couldn’t be any worse as the retail holiday season is around the corner. Seroka said that the big box retailers have had time to stock up their inventories ahead of time, expressing concern for small and medium-sized businesses which typically use the last 12 weeks before the holidays to make payroll and keep their business viable. The Port of Los Angeles has had a very strong peak season, having handled 960,597 TEU in August 2024, a 16% increase year-on-year and just over 20,000 TEU more than the port handled in July 2024.

Ports around the world, including Rotterdam, are bracing for the ripple effects of the US east and gulf coast dockworker strike. A spokeswoman for the Port of Rotterdam Authority described the potential consequences as “very undesirable,” as vessels destined for the US could not be loaded or unloaded. She added that while a short strike of a few days may have limited impact, a prolonged disruption lasting more than a week could severely affect global logistics chains. Rotterdam is already facing challenges due to disruptions in the Red Sea, where ships are being forced to detour around the Cape of Good Hope to avoid conflict zones, further complicating international trade routes.