The recent three-day strike by dockworkers at East and Gulf Coast ports is set to cause a delayed reduction in capacity on certain trade lanes and may impact cargo frontloading ahead of a possible work stoppage in January, according to container shipping analyst Lars Jensen.
Although the strike lasted only from October 1-3, Jensen, CEO of Vespucci Maritime and a contributor to the Journal of Commerce, emphasized at the South Carolina International Trade Conference that its effects will linger. “A three-day strike may seem minor, but its repercussions are far from over,” he said. “The impact on tonnage supply will persist until at least mid-November, with some ripple effects just starting to emerge.”
Jensen shared data indicating that the Asia to US East Coast trade lane is expected to experience a 17% capacity drop in week 46, starting November 11. If the strike had lasted a week, the decline could have reached 40%. For trans-Atlantic shipments from Northern Europe, there will be a 10% capacity reduction in week 42, followed by a slight recovery and another 15% drop in week 44.
Two weeks post-strike, ships on the trans-Atlantic backhaul are facing delays in their arrivals to Europe, affecting export capacity. Jensen noted that Latin American exports will feel the impact after three to four weeks, with Asian exports affected after five to six weeks. “These disruptions are like dominoes falling,” he explained. “Any issue anywhere in the world can ripple through the system for months.”
Carriers are echoing similar concerns regarding equipment availability and scheduling. Stuart Sandlin, president of Hapag-Lloyd North America, remarked on the complications posed by the strike and the slow steaming around the Cape of Good Hope. “These disruptions throw a wrench in the supply chain,” he stated. “It’s frustrating to have a $320 million vessel ready but no containers to load.”
Jensen also highlighted mid-November as a critical period when the operational effects of the October strike may begin to dissipate, coinciding with renewed supply chain concerns ahead of the January 15 deadline for the International Longshoremen’s Association (ILA) and United States Maritime Alliance (USMX) to finalize a new master contract.
Should a contract not be reached soon, Jensen anticipates another influx of cargo to the US, further straining capacity. This surge could be intensified if Donald Trump wins the upcoming presidential election, raising concerns about potential tariffs that might lead to increased volumes before he takes office in January. “This could result in an early peak season for exports out of Asia,” Jensen concluded, drawing parallels to the early peak season seen last summer.
Source: www.joc.com