Port Strike Potential: Could This Be the Next Supply Chain Crisis?

In August 2024, imports of container cargo into the United States jumped by 12.9% compared to last year. This surge was mainly driven by concerns over a potential strike at major ports on the East Coast and Gulf of Mexico, according to data from Descartes Systems Group.

Although the volume in August was slightly lower than the peak in July, almost 2.5 million containers passed through U.S. ports, creating congestion and delays. These levels of traffic remind experts of the early days of the pandemic when ports faced similar backups.

Rising Labor Tensions

The import rush comes as labor tensions grow between the International Longshoremen’s Association (ILA), which represents around 45,000 dock workers, and the United States Maritime Alliance (USMX), the group of shipping companies and terminal operators. Their current labor agreement is set to expire on September 30.

If an agreement is not reached, the ILA workers, who manage nearly half of the U.S.’s ocean trade, are prepared to strike. The main sticking points include disputes over wages, benefits, and the impact of automation on jobs.

A.P. Moller-Maersk, the world’s second-largest container shipping company, warned that even a one-week strike could cause 4-6 weeks of delays. As a result, there would likely be significant backlogs at key ports like New York/New Jersey, Houston, and Savannah, Georgia.

Retailers Are Preparing

In response to the potential strike, big retailers like Walmart and Target have been rushing to import goods early. They are bringing in stock earlier for their seasonal promotions, such as back-to-school and Christmas sales, to avoid being affected by any shipping delays.

The shortened Christmas shopping season this year, due to the later-than-usual Thanksgiving, has put even more pressure on retailers to have their products ready and in stores on time.

Increase in Industrial Shipments

In addition to the early stockpiling by retailers, industrial shipments have also increased, contributing to the rise in container traffic. The uptick in production has resulted in more goods being shipped earlier than usual, further straining port capacity.

Potential Impact of a Strike

If a strike does occur, the effect on U.S. imports could be serious. Delays at ports would make it harder for businesses to get the products they need, leading to disruptions in supply chains. The cost of goods might increase, and retailers could face shortages during the busy holiday season.

Moreover, extended delays in shipping could also create moisture-related challenges for sensitive products like electronics or agricultural goods. In such cases, products that stay on ships for too long may suffer from moisture damage. Super Dry provides technology that can help prevent this kind of damage, ensuring that goods remain safe and protected, even during longer transit times.

Free Expert Guidance

For expert guidance on protecting your cargo, consult with our team at www.superdryers.com and keep your shipments safe from moisture damage!