The strike action at major US ports has ended following a tentative wage agreement between the International Longshoremen’s Association and the United States Maritime Alliance. However, the aftermath of the strike continues to disrupt supply chains, with over 40 ships currently waiting to offload billions of dollars’ worth of cargo. The two parties have agreed to extend the Master Contract until January 15, 2025, allowing more time to negotiate key issues, including port automation.
Although the strike only lasted three days, it resulted in significant delays. Currently, 44 ships are queuing to enter affected ports, with an additional 120 vessels en route. Industry experts warn that it will take weeks to clear the backlog, potentially affecting supply chains globally. Peter Sand, Chief Analyst at Xeneta, noted that the temporary closure of US East Coast and Gulf Coast ports has created a ripple effect across international trade routes. Ships delayed at these ports will also arrive late to other regions, potentially disrupting shipping schedules through early 2025.
The latest data from Xeneta shows that freight rates have already increased as a result of the disruptions. Spot rates from North Europe to the US East Coast reached $2,900 per 40-foot container on October 4, a 58% rise since the end of August. Rates on alternative routes, such as North Europe to the US West Coast, have also surged by 48%, reaching $4,450 per container. Market conditions are expected to remain challenging in the weeks ahead as the industry recovers from the strike’s impact. Further disruptions are possible if negotiations around port automation are not resolved within the new contract period.
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