Chaos is re-emerging in the container shipping sector. A combination of strikes in ports in North America and war in the Middle East threatens the return of congestion to shipping.
In the US the threatened strike at the East Coast ports by the International Longshoreman’s Association (ILA) has been realised. Although the Union does not appear to have made a definitive statement about the start of the strike, reports from the individual ports and in the media suggest that all of the ports on the US East Coast and the Gulf coast have ceased operations. There are ILA pickets at the entrances to several ports on the East Coast.
It is unclear how long the strike will continue, however the employer’s organisation, the ‘United States Maritime Alliance’, commented that “In the last 24 hours” they and the ILA had “traded counter offers related to wages” with the employers increasing “our offer” and that “both sides have moved off their previous positions”. The ILA continues to make aggressive statements around automation, however it does appear that there is some movement on the core issue of pay.
There is also disruption in Canada, with continuing strikes at the port of Montreal which is one of Canada’s largest container ports.
The combination of the two strikes will have a substantial impact on freight movement in North America. The US West Coast ports are probably in a better position to cope with increased volumes than they have been in the past, with access to containers somewhat better than in 2021-2022, however the pressure on the rail and road systems will be significant if the strikes continue for more than a few days.
The danger for the container shipping sector is that the increasing violence in the Middle East will combine with the closure of East Coast North American ports to disrupt the functioning of shipping networks. Already under pressure from the problems in the Red Sea, container shipping lines may struggle to adapt further their operations, leading to less reliable operations. Container freight rates have fallen over the past several weeks, however, it is possible that these new problems may limit or reverse these falls.
Source: Ti Insight
Author: Thomas Cullen
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