The ILA port worker strike concluded last Thursday following the union's acceptance of the USMX's proposal, which includes a 62 percent wage increase over six years. The agreement also extends the expired contract until January 15, to address unresolved issues, notably port automation's role.
Despite the wage resolution, the union continues to oppose any form of automation that could lead to job losses. This stance sets the stage for further negotiations, with both parties returning to face-to-face discussions for the first time since June. The cessation of the strike allowed ports to reopen on Friday, but the three-day halt has resulted in a backlog of containers, with estimates suggesting between 45 and 60 vessels are waiting at East Coast and Gulf ports.
The Port Authority of New York and New Jersey anticipates a swift recovery from the backlog, likening the situation to delays typically seen after winter storms. However, shippers may still face delays as ports work to restore operations. The reopening of ports has also led to the resumption of reefer export bookings and the reinstatement of detention and demurrage charges.
In anticipation of the strike, carriers had increased rates for transatlantic containers, with prices last week 44% higher than in early September. The strike's impact on East Coast ports, coupled with congestion at several European hubs, is exerting upward pressure on rates. Meanwhile, transpacific ocean rates have been declining, with carriers suspending surcharges planned in anticipation of the strike.
The strike's conclusion and the past peak season demand suggest a continued easing of transpacific container rates. However, East Coast congestion may slow this decline. The situation is further complicated by Red Sea diversions, which are expected to maintain a floor on rate reductions. The strike has also prompted a shift from ocean to air cargo, with an increase in rates on some lanes, reflecting the ongoing adjustments within the freight industry.
Source: Container News