The International Longshoremen's Association (ILA) strike at US East Coast ports has entered its second day, with significant attention on the duration of this industrial action and its potential ramifications on global shipping and capacity. Currently, shipping lines are operating at full capacity, engaging 62 deep-sea services. Unless resolved swiftly, these vessels will face delays, beginning at their first scheduled port of call in the US. This situation not only affects vessels already in the process of discharging but also those en route to the US East Coast.
The strike's impact on weekly capacity loss and the global fleet's cumulative capacity is substantial. In the initial week, the capacity loss is highest, around 775,000 Twenty-foot Equivalent Units (TEU), incorporating both vessels already at the coast and new arrivals. This loss represents almost 7% of the Global Fleet if the strike extends to four weeks, underscoring the significant disruption to the supply-demand balance.
Operationally, more than 60 vessels are anticipated to accumulate outside USEC ports weekly, with a third of these near New York. This congestion leads to a weekly capacity loss exceeding 400,000 TEU, escalating freight rates not only to the US but across all major deep-sea trades. The operational impact analysis, sourced from Sea-Intelligence's Liner Shipping Schedules database, includes all deep-sea liner services making regular scheduled port calls in North America East Coast (NAEC) ports, alongside East Coast Mexico and Caribbean hub ports.
The analysis intentionally excludes short-sea and intra-regional services due to the US Jones Act and the logistical impracticality of rerouting these services. The focus remains on deep-sea services, with a detailed examination of vessel schedules and the operational reality of liner services, including potential alterations and delays.
As the strike unfolds, shippers are exploring alternatives, including shifting to West Coast and air freight solutions, despite the challenges and higher costs associated with these options. The strike's logistical consequences extend beyond the immediate disruption, with potential long-term impacts on global supply chains, particularly for industries reliant on just-in-time delivery models.
With billions of dollars of US economic activity at stake, the strike's resolution remains a critical concern for all stakeholders. The ILA's demands include pay raises and a ban on automation, emphasizing the broader labor disputes within the maritime industry. As discussions continue, the global shipping community closely monitors the situation, aware of the potential for extensive supply chain disruptions and increased transportation costs.
Sources: Sea-Intelligence / Container News / Scripps News