The recent three-day strike by dockworkers at East and Gulf coast ports may have ended quickly, but its effects will be felt in global trade for weeks to come. Lars Jensen, CEO of Vespucci Maritime and container shipping analyst for the Journal of Commerce, warned Thursday that shippers should brace for a delayed reduction in capacity on certain trade lanes, with potential disruptions continuing into January. Speaking at the South Carolina International Trade Conference, Jensen explained that despite the strike’s short duration from Oct. 1-3, its ripple effects are already being observed.
“A three-day strike doesn’t seem significant, but its impacts are far from over,” Jensen noted. “The consequences will linger at least until mid-November, and we’re only beginning to see the full scope of the disruptions.”
According to data from Vespucci Maritime, the Asia-to-US East Coast trade lane is expected to see a 17% reduction in capacity by the week of Nov. 11 (week 46). Had the strike lasted a full week, that drop would have been closer to 40%. Trans-Atlantic shipments from Northern Europe are already experiencing a 10% reduction in capacity in the current week (week 42) and will face further reductions of 15% by week 44, before seeing some recovery.
Jensen explained that the cascading delays are affecting trade routes in stages. Ships on the trans-Atlantic backhaul trade have already been delayed in their return to Europe, reducing export capacity. Latin American exports will feel the impact within three to four weeks, with Asia exports affected in five to six weeks.
“These disruptions are like falling dominoes,” Jensen said. “Every time we face an issue like this somewhere in the world, the ripple effects last for months.”
Shipping carriers share these concerns. Stuart Sandlin, president of Hapag-Lloyd/North America, highlighted the strain on equipment availability and shipping schedules, particularly as slow steaming around the Cape of Good Hope further complicates operations. “These disruptions throw a wrench in the supply chain. For us as a carrier, the worst scenario is having a ship ready but no containers to load due to these issues,” Sandlin said.
Looking ahead, Jensen also warned of another potential surge in cargo as supply chain concerns could resurface ahead of a January 15 deadline for the International Longshoremen’s Association (ILA) and the United States Maritime Alliance (USMX) to finalize a new master contract. Without a deal, another round of labor disruptions could strain shipping capacity. If Donald Trump were to win the November presidential election, Jensen also anticipates the potential for tariffs, which could further fuel volumes before Trump would take office in January.
“This could mean an early peak season for exports out of Asia, similar to what we saw this past summer,” Jensen added, with heightened demand before the Lunar New Year as shippers work to stay ahead of any possible disruptions.
Source: www.joc.com