Freight carriers fear the port strike will paralyze half of US trade

The world’s largest container shipper is urging customers to move U.S. cargo through East Coast and Gulf ports ahead of the planned start Tuesday of a pork strike that threatens to cripple up to half of the nation’s maritime trade.

MSC Mediterranean Shipping Co. SA, in a customer alert on Thursday, said talks between the seafarers’ union and port employers “may not be resolved” by the September 30 deadline, leading to terminal closures from October 1. This would delay shipping. of containers – both import and export – by truck and rail through ports from Boston to Houston.

“Adjustments to reservations, including rolls to other ships or cancellations, may be necessary,” MSC said in its advisory. The Geneva-based company said it would continue to accept requests for dry cargo services, while reserving the right to “not accept new refrigerated bookings”.

Hapag-Lloyd AG, the world’s No. 5 container carrier, said bulk and bulk cargo could also be affected. It warned that industrial action would increase transport rates.

“Transportation costs, including freight, storage and transportation rates, are expected to increase due to increased demand for alternative routes and port services,” the Hamburg-based carrier said in a note published on its website. “Emergency surcharges may also apply to account for additional handling and congestion.”

Backup routes

Customers may not be able to easily switch to alternative routes either. CH Robinson Worldwide Inc., one of the largest U.S. freight brokerages, warned in a statement that “in the event of a strike beginning Oct. 1, emergency routes could be overwhelmed very quickly.”

Oxford Economics has estimated that a strike would cost the US economy between $4.5 billion and $7.5 billion a week — a hit to gross domestic product that will be reversed once it ends and supplies resume.

According to Oxford Economics, every week cargo is blocked and the delays created will last a month because West Coast ports – which could become alternative gateways for cargo trade – are already operating at full capacity.

For now, a change in its US economic forecast is not warranted, Oxford Economics’ Grace Zwemmer wrote in a research note on Thursday.

“However, the strike has the potential to weigh on October’s employment report at a time when the Federal Reserve is watching closely for signs of weakness in the labor market,” she said.

Fearing strike disruptions, many shippers have received early orders in recent months.

The preparation

From July to Sept. 22, Atlantic and Gulf coast ports saw a 27 percent year-over-year increase in vessel arrivals, according to data from FourKites Inc., a supply chain visibility platform.

“I expect a decline in the number of vessels this week and next as fears of them being forced to anchor offshore are starting to emerge,” said Mike DeAngelis, senior director of international solutions at Chicago-based FourKites.

Prospects for resuming any talks before Monday look bleak with no talks scheduled.

Photo: Photo credit: Samuel Corum/Bloomberg

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US carriers