A potential strike at US East Coast ports could disrupt the global shipping industry, with lengthy recovery times and significant challenges for supply chains and freight rates.
Port of New York & New Jersey
A potential strike at all US East Coast and Gulf Coast ports is expected to cause significant disruptions to the global supply chain, creating major problems for shipping stakeholders around the world.
As operations at 36 major US ports – which handle 40-50% of the country’s imports and exports – face the possibility of shutdown by October 1, the global shipping industry is under strain.
“If the strike proceeds, we have reason to expect negative impacts on shippers moving cargo to the US,” said Han Deng, shipping partner at law firm Reed Smith. “Not only is it likely to increase shipping costs, but we also expect this to impact retailers’ ability to meet demand for the holiday shopping season in the United States.”
Notably, in 2023, a single day of closure of US West Coast ports caused three weeks of delays, with inventory holding times increasing by up to 148%, according to supply chain platform Project44. Reports suggest that a potential East Coast strike could last longer, possibly several weeks. Project44 estimates that recovery could take four to six weeks for each week of port closure. Similarly, Danish data firm Sea Intelligence predicts that a single day of strike action by the International Longshoremen’s Association of America (ILA) would take five days to recover.
“The impact of such a strike could linger long after it is resolved, with the disruptions mentioned taking weeks or months to recover, in a highly inflationary economy with regional conflicts and geopolitical instability,” Deng noted.
With the peak shipping season already underway, Project44 analysts say it is too late to divert cargo volumes to the West Coast, jeopardizing holiday season inventories and prices.
Deng also noted that the Port of New York & New Jersey would be among the ports most severely affected by the strike. According to the nonprofit research organization Mitre, the major US port could lose about $640 million per day.
“It is no surprise that the Port Authority of New York & New Jersey is trying to ramp up operations as much as possible ahead of the looming deadline,” the shipping lawyer pointed out. “This includes encouraging shippers to deliver as much cargo as possible and coordinating with supply chain partners.”
According to the port authority, about $240 billion worth of goods are shipped through the port each year.
“As we have seen in recent history with major delays at ports, supply chain disruptions, delayed shipping schedules, and altered shipping routes, such as the global Covid-19 pandemic and the collapse of the Baltimore Bridge in March 2024, similar things will happen again,” the lawyer said.
While it is difficult to make direct comparisons between periods, it is worth noting that the last ILA strike on the US East Coast in 1977 caused ports to shut down for 44 days.
According to Container-News
