Cover Story
US importers have just weeks before the window closes on frontloading cargo through ports from Maine to Mobile to avoid having shipments delayed due to another possible strike by the International Longshoremen ’ s Association ( ILA ). Exporters also face disruption , incentivizing the shipping of outbound loads earlier , in case the ILA and the United States Maritime Alliance , representing major ocean carriers and terminal operators , can ’ t come to an agreement on vastly different stances on automation and other issues including royalties and jurisdiction .
“ We are very cognizant that Jan . 15 will be a consequential date .”
“ We are very cognizant that Jan . 15 will be a consequential date ,” Siva Narayanan , global logistics director at Solvay Oil & Gas , said Oct . 8 at a National Industrial Transportation League event in Austin . “ We might have a perfect storm because multiple events will be taking place towards Jan . 15 , the January pickup period when we will be building inventory and shipping it out for the next quarter .”
Inclement weather in the US Midwest , particularly Chicago , is another possibility , he said . Even more disruptive would be Donald Trump winning a second presidency and following through with his threat to jack tariffs up by 10 % to 20 % across the board and wallop Chinese imports with tariffs of 60 % or more . Some shippers are already frontloading goods for the possibility of Trump being sworn in Jan . 20 , which would be just five days after the ILA ’ s tentative contract extension expires .
The wounds from the union ’ s three-day strike in early October are still fresh . CSX and Norfolk Southern Railway intermodal train service has nearly fully recovered after slowing down operations ahead of the strike and then
weathering hurricanes Milton and Helene . It ’ s taking container shipping schedules longer to recover , however , effectively reducing available capacity on trades connecting to Asia and Europe .
“ A three-day strike doesn ’ t sound like much , but that doesn ’ t mean it ’ s over ,” Lars Jensen , CEO of Vespucci Maritime and a Journal of Commerce analyst , said Oct 18 . at the South Carolina International Trade Conference . “ The regular cost from just a three-day strike is going to be with us at least until the middle of November . Some of the ripple effects are only just now beginning to show themselves .”
The Asia – US East Coast trade lane will see a roughly 17 % drop in capacity in the week that begins Nov . 11 , according to Jensen . If the strike had lasted a week , that drop would have been about 40 %. For trans-Atlantic shipments from Northern Europe , capacity dropped by about
Asia – US East / West Coast rate spread shrinks amid ILA strike
Container spot rates from North Asia to US West and East coasts , in USD per FEU
USD per FEU
$ 10,000
$ 8,000
$ $ 10,000 6,000
$ 4,000
$ 2,000
$ 0
Source : Platts , S & P Global
L Jan 2023 Jul Jan 2024 Jul
North Asia to US East Coast North Asia to US West Coast
© 2024 S & P Global
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12 Journal of Commerce | November 4 , 2024 www . joc . com