Strike action could have major impact on US East Coast

Container distribution via the East Coast and Gulf Coast of the US could come to a halt at the start of October if, as looks increasingly likely, terminal operators and port workers fail to agree on a new six-year labour agreement.

The potential for a strike increased in recent days after the International Longshore Association (ILA) turned down a contract proposed by the United States Maritime Alliance (USMX), which runs port operations along the two coasts.

Negotiations have apparently stalled over the question of salaries and a dispute with APM Terminals over its use of automated gate technology at the Port of Mobile.

ILA’s current agreement with USMX expires on 30 September, and the union insists it will begin strike action immediately after that if a new deal is not agreed.

The impact of such a walkout would be enormous, according to Alan Murphy, CEO of Sea-Intelligence.

“Using historical data, we estimate US East Coast handling volumes of 2.3m TEU in October, which translates into 74,000 TEU per day, split 36,000 on imports and 38,000 on exports,” he explains. “For empties alone, a strike would mean the inability to load 20,000 TEU each day.”

Even if the dispute were then resolved, the additional containers would have to be dealt with alongside normal cargo traffic. According to Sea-Intelligence research, the ports would have an estimated extra capacity of maximum 13 per cent in October.

“It would take six days to clear the backlog from one day of strike,” Murphy observes. “If the ports have just a little more excess capacity available, this would more realistically bring this figure down to four to five days.

“However, this means that a one-week strike in the beginning of October, would not be cleared until mid-November. If we get a two-week strike, then realistically, the ports would not be back to normal operations until we are into 2025.”