Union's industrial action due to ongoing disputes
The International Longshoremen's Association (ILA) recently undertook a three-day strike at ports on the US East and Gulf coast, causing substantial disruption to the country's imports and exports. The strike, which ended after a "tentative agreement" was reached in negotiations between the ILA and the United States Maritime Alliance (USMX), has resulted in various shipping lines applying emergency operations surcharges and local port charges.
Hapag Lloyd, MSC, and Maersk are among the shipping lines that have implemented surcharges. Hapag Lloyd is applying a Work Disruption Surcharge of $1,000 per teu from 18 October on container shipments to the US east and Gulf coasts. MSC has notified its customers that it is applying a $1,000 surcharge per 20ft container, and $1,500 per 40ft container. Maersk has implemented a local Port Disruption Surcharge of $1.500 per teu (20ft equivalent unit) for all cargo moving to and from USA East Coast and Gulf Coast terminals. CMA CGM has advised that US east and Gulf coast local port charges for import shipments of $1,500 per teu would be applied. Export shipments would be subject to local port charges of $800 per 20ft and $1,000 per 40ft.
The strike affected 36 ports, impacting 70% of all containerized US exports and roughly 56% of US imports. If a liner decides to anchor outside a port and wait for disruption to end, cargo on that vessel won't be unloaded until the port is reopened and the vessel docks. This has led to delays in shipping, with the length of delays depending on specific schedules and cargoes. Shipping lines may decide to re-route vessels, meaning cargo is discharged in a different location. The mode by which a container travels could change, from ship to rail, or ship to air freight.
The strikes have had an impact on US imports and exports, with estimates suggesting a one-week strike would cost the US economy about $2.1 billion. Most of the cost would be a $1.5 billion loss in the value of perishable goods that couldn't be delivered on time. Under the deal, members of the ILA will see an approximately 62 percent wage increase.
Shippers had already brought imports and exports forward ahead of the Christmas and Thanksgiving surge, causing container rates to increase on shipping trade routes to and from the US. The precarious nature of international shipping means that disruption, delay, and surcharges have obvious cost implications on doing business, with wider economic impact.
Customers and clients affected by the strike are being contacted by Crown Relocations and Crown World Mobility to discuss circumstances and options. The strikes come at a time when inflation had been falling and high shipping rates caused by previous events were starting to come down.
In conclusion, the ILA strike has caused significant disruption to the US container shipping industry, leading to surcharges, delays, and potential rerouting of cargo. The economic impact is far-reaching, affecting both businesses and consumers.
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