A labor impasse on U.S. East Coast ports between the International Longshoremen’s Association and the United States Maritime Alliance threatens to halt operations and cause damage to supply chains and to the economy, according to container marketplace firm Container xChange.
With an Oct. 1 deadline for negotiations, industries across the nation are bracing for significant disruptions if a strike occurs, according to a news release.
Essential goods, including imported retail items, automotive parts, and perishables could be stranded at ports or rerouted at considerable expense, the release said.
The strike could severely challenge importers of perishables, including fresh produce. For example, USDA statistics show that 37% of all bananas imported to the U.S. in 2023 were imported through the Philadelphia port district, which also includes Wilmington, Del.
“The strike could push the container trade into chaos, with ripple effects that potentially will disrupt supply chains well,” Christian Roeloffs, co-founder and CEO of Container xChange, said in the release. “The congestion and delays at these major ports will severely impact the availability of containers, increase costs, and disrupt schedules. Small traders, in particular, may feel the squeeze as they are more vulnerable to price surges and extended delays in securing and moving their boxes. Businesses are acting now to reroute shipments and secure their container supply, or they risk being left stranded in a congested and costly aftermath.”
Container xChange said immediate supply chain challenges include stranded cargo, rerouting challenges and cost escalations.
Redirecting shipments to West Coast ports or alternate East Coast ports could create a logistical bottleneck, especially for goods requiring passage through the Panama Canal, according to the release, which noted that Maersk has already announced a disruption surcharge for all cargo moving to and from U.S. East Coast and Gulf Coast terminals, starting Oct. 21. The surcharge will be $1,500 per 20-foot equivalent unit and $3,000 per 40-foot equivalent unit (FEU), depending on the extent of the supply chain disruption, Container xChange reported.
Some recommended moves for supply chain participants include rerouting shipments, prioritizing high-value and critical goods, expediting customs and clearance and diversifying diversify suppliers and logistics providers.
If the strike begins on Oct. 1, it’s estimated that the resulting supply chain disruptions could cost the U.S. economy over $1 billion per day, the release said.
While immediate actions can help alleviate short-term disruption, the long-term effects of a strike could extend well into 2025, according to Container xChange. With major global carriers already preparing to impose surcharges on shipments to and from the U.S. East Coast, cost pressures will increase across the board, the release said.
“It’s not just about getting containers out of the port — it’s about keeping trade moving in an increasingly fragile supply chain,” Roeloffs said.
