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US port strike ends after three days but backlog could take weeks to clear

ILA and USMX reach tentative wage agreement, extend existing contract until January 15

The dockworker strike at US east and Gulf coast ports turned out to be brief, minimising market impacts. However, there will be still be supply chain effects: The offshore backlog had already risen to 60 containerships by the time the deal was reached

THE strike that shuttered US east and Gulf coast ports is over, at least for now. 

The International Longshoremen’s Association and United States Maritime Alliance (USMX) reached a “tentative” deal on a 61.5% salary increase late on Thursday. USMX had previously offered 50%.

The current contract will be extended until January 15, 2025 while the two sides negotiate other terms, including those on automation. ILA workers will be back on the job on Friday.

Because ports were only closed for three days, future upside for freight rates should be minimised. But that does not mean there will be no effects.

The rule of thumb is that for every day the ports are closed, it will take around five to seven days for supply chains to recover, meaning it will take around three weeks to work through volumes that have already piled up.

A large amount of vessel capacity has been waylaid by the work stoppage, despite its quick resolution. As ILA workers unload the vessels that are already in the queues, more ships will continually arrive from Asia, Europe and Latin America, replenishing the queues, meaning it will take time for the traffic jam to clear.

Breakdown of ships in queues and en route

There were 60 fully cellular containerships with total capacity of 363,620 teu waiting off US east and Gulf coast ports on Thursday afternoon (including those at anchor or loitering at under five knots), according to ship-position data from Lloyd’s List Intelligence’s Seasearcher.

The average capacity of ships in the queues is 6,060 teu; nine waiting vessels have capacity of more than13,000 teu. 

MSC has the most ships in the backlog, with 13. Maersk has nine waiting and Zim has four.

The largest concentration of waiting container vessels — 11 — is off New York/New Jersey. The second largest concentration — eight — is off Norfolk. There are six containerships off Savannah, four off Houston, four off Philadelphia and three off Charleston.

There are 13 containerships in aggregate off Florida ports Miami, Port Everglades, Jacksonville, Tampa and Palm Beach, including multiple smaller feeder vessels.

 

 

Meanwhile, there is a high volume of inbound capacity en route to east and Gulf coast ports. More than 75 containerships are inbound on the Atlantic side, including those coming across from Europe, through the Caribbean from Panama, and via the Cape of Good Hope.

 

 

In addition, there are also least 40 containerships that have already loaded in Asia that are en route across the Pacific to the Panama Canal, most of which will head toward the US east and Gulf coast ports.

 

 

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