With strikes likely to begin after midnight Monday at ports up and down the East Coast and along the Gulf Coast, logistics executives tell CNBC they need to move as much trade as possible before severely damaging shutdowns begin. He said the remaining time was critical. The functioning of the U.S. economy.
A total of 54,456 20-foot equivalent units (TEUs) were shipped between the International Longshoremen’s Association and the International Longshoremen’s Association on Friday, based on data from Import Genius, which tracks bills of lading, digital receipts for cargo containers. arrived at 14 ports operated under basic contracts. The United States Maritime Alliance (USMX) expires at midnight Monday. Based on MDS Transmodal’s estimate of $50,000 per container, the cargo’s approximate value was more than $2.7 billion. During the weekdays from September 23 to 27, a total of 273,417 TEUs were attributed through customs at these ports, with a value of approximately $13.67 billion.
Alan Baer, CEO of OL USA, said the high volume of cargo arriving on Friday alone meant logistics companies were scrambling to get containers off docks by the close of business on Monday. He said he is doing so. “Importers should work with their logistics partners to try to remove as many containers as possible from open terminals to avoid potential delays in stock availability,” Baer said.
On average, it takes a week to clear a single day’s port closure. Between 43% and 49% of the total containerized goods entering the United States are processed through ports on the East Coast and Gulf Coast.
Michael Kanko, CEO of ImportGenius, told CNBC that the economic importance of the ports affected by the ILA strike is significant. “Our data shows that even a one-week strike would prevent hundreds of thousands of containers from entering the United States,” he said. “These ports are also the primary gateways for refrigerated agricultural products into the United States. Time is not on the importer’s side.”
“All importers, exporters, and even domestic shippers should closely monitor this week’s developments, as the impact of the U.S. East Coast and Gulf Coast port strikes is likely to continue as the strike occurs and continues for an extended period. “If we do that, it could impact all modes’ sooner than a few days,” said Brian Burke, global chief commercial officer at Seco Logistics.
The ILA is the largest longshore workers union in North America. In a social media post on Sunday, the ILA said its 85,000 members “in solidarity with tens of thousands of longshoremen and maritime workers around the world” will picket at 12:01 a.m. on Tuesday, Oct. 1. He announced that he would be entering the line. Attack all Atlantic and Gulf ports from Maine to Texas.
Approximately 50,000 ILA members work at ports in Boston, New York/New Jersey, Philadelphia, Wilmington, Baltimore, Norfolk, Charleston, Savannah, Jacksonville, Tampa, Miami, New Orleans, Mobile, and Houston.
Negotiations were not progressing and nothing had been planned by Monday’s deadline, Reuters reported.
In recent days, senior Biden administration officials, including Transportation Secretary Pete Buttigieg, Acting Labor Secretary Julie Su, and National Economic Council Chair Lael Brainard, have met separately with USMX and ILA representatives to encourage both parties. He urged them to quickly reach a fair agreement. The Biden administration has said several times in recent days that it does not intend to use federal power to force longshoremen to stay on the job. “We have never invoked Taft-Hartley to break up a strike, and we are not currently considering doing so,” White House officials said.
The union called off talks with the USMX in June over issues such as the use of automation at the port and wages, and the port owners’ association has said in recent weeks that the ILA has already decided to strike. “We continue to strongly suggest that,” he said.
The port strike could threaten recent gains in reducing inflation and the prices consumers pay on a wide range of items, giving former President Donald Trump a new talking point on a key voter issue: the economy in the final months of the campaign. It is possible to give .
Based on previous port strikes, ocean-going carriers typically benefit from higher freight rates based on demand at other ports, as well as from detention and demurrage fees for containers stranded during port closures. Analysts warn that ocean spotting rates could increase by 20-50%. UBS predicted that 20% of Maersk’s total volume would enter U.S. ports affected by the strike. Maersk sits on USMX’s board of directors. UBS estimated that if freight rates rose 30% in two quarters, it would create a revenue tailwind of more than $1 billion.
Meanwhile, support for labor unions is a key issue for Democrats, with President Biden recently stressing to reporters that he “doesn’t like” Taft-Hartley.
Business groups are calling on the Biden administration to intervene. The U.S. Chamber of Commerce released a poll Monday morning showing that both registered voters (58%) and the general population (54%) support the Biden administration’s interventions and orders. Unions need to use Taft-Hartley to operate and negotiate. About 20% of respondents said they opposed federal intervention.
In a recent video that ILA President Harold Daggett played to rank-and-file union members who voted unanimously in favor of strike authorization, he said that if the Biden administration forces union workers back to the docks, container movements will be delayed. Threatened to intentionally slow down. Taft-Hartley method. “We’d better sit down, get a deal, and move on,” he said.
A wide variety of products were still arriving at the Port of New York/New Jersey, the East Coast’s largest port, on Friday, including containers containing Estée Lauder and L’Oréal cosmetics and perfumes, as well as auto parts and tires, U.S. Customs data showed. It was shown that there is. Electrical materials and circuit breakers from ABB, a leader in automation and electrical.
Hundreds of containers have arrived over the past week for retailers from Walmart to Walgreens, filled with winter clothing, food, electronics, towels, and holiday items ranging from Disney Halloween items to Christmas string lights. It was done.
Walmart is the largest importer in all threatened ports, according to ImportGenius data.
A spokesperson for the Port Authority of New York/New Jersey said it is closely monitoring developments. The port began preparing for the strike two weeks ago.
“We are working with partners across the supply chain to prepare for any potential impact,” the spokesperson said. “With the more than 600,000 local jobs our ports support and the $240 billion in goods that pass through them each year, we need to find common ground on both sides to deliver cargo for the national economy. I urge you to keep the flow going.”
Depending on the length of the strike, damage to the U.S. economy could reach tens of billions of dollars. For the Port of New York/New Jersey, the economic impact could reach $641 million per day. Meanwhile, Mitre’s analysis estimates that Virginia would see an economic impact of $600 million per day.
Ports on the U.S. East Coast are expected to handle 2.3 million TEUs (20-foot equivalent units) in October. This equates to 74,000 shipping containers per day, with a daily cargo value of more than $3.7 billion.
Steve Lamar, president of the American Apparel and Footwear Association, recently told CNBC that disruptions to the Eastern and Gulf ports will have a significant impact on the cost and availability of clothing, footwear and travel goods. Accessories travel through these ports.
German footwear giant Birkenstock imported and processed more than 32,000 packages and cargo at the Port of Virginia in Norfolk between September 23rd and September 23rd. 27.
Amazon.com Services, a subsidiary of Amazon.com that provides e-commerce services to third-party sellers, said more than 26,000 small smart cameras and other products arrived between September 23 and September 25. passed through customs.
Ace Hardware processed more than 64,000 items in 57 containers through customs between September 23 and September 26.
Anheuser-Busch InBev is another major importer whose products have cleared customs in recent days.
Paul Brasher, vice president of global supply chain for ITS Logistics, said the company has been talking with customers about their cargo collection strategies over the past two weeks.
“If shippers wait until Monday to bring in additional trucks to pick up their cargo, it will be too late to move available containers out of the terminal to avoid excessive late fees during the strike. I think it might be,” Brashear said. “Shippers should not be lulled into a false sense of security during a strike because, as with COVID-19, supply chain disruptions did not occur until operations resumed after the shutdown,” he said. said.
In a recent advisory to customers, the Georgia Ports Authority recommended that imported goods be delivered “well before October 1 to minimize disruption.”
In addition to apparel, the Port of Savannah on Friday featured thousands of LED panels, a Keurig coffee brewery and Constellation brand wine. The Port of Houston confirmed arrival of Tempur-Pedic mattresses and products from Home Depot and IKEA on Friday.