Sceep
🖕___ 😆___ 🖕
This is gonna fuck up a LOT of things.
With a potential strike at ports up and down the East Coast and along the Gulf Coast set to begin after midnight Monday, logistics executives tell CNBC the remaining hours are critical in moving out as much trade as possible before a shutdown that will do serious damage to the functioning of the U.S. economy.
Based on data from ImportGenius, which tracks the bills of lading — the digital receipts of cargo containers — a total of 54,456 twenty-foot equivalent units (TEUs) arrived on Friday at the 14 ports operating under the master contract between the International Longshoremen’s Association and the U.S. Maritime Alliance (USMX) which expires at midnight Monday. The approximate value of that freight was upward of $2.7 billion, based on an MDS Transmodal estimate of $50,000 per container. For the weekdays between Sept. 23-27, a total of 273,417 TEUs were imputed through customs at these ports with a value of approximately $13.67 billion.
On average, it takes one week to clear out one day of a port closure. As much as 43% to 49% of total containerized goods entering the U.S are processed through ports on the East Coast and Gulf Coast.
Michael Kanko, CEO of ImportGenius, tells CNBC the economic importance of the ports impacted by an ILA strike is profound. “As our data shows, a strike of even a week will block the flow of hundreds of thousands of containers into the U.S.,” he said. “These ports are also a major gateway into the U.S. for refrigerated produce. Time isn’t on the side of importers.”
Alan Baer, CEO of OL USA, said the enormity of the freight volumes arriving Friday alone shows the scramble logistics companies are in to get the containers off the dock by close of business Monday. “Importers, in coordination with their logistic partners, should try to clear as many of their containers off open terminals where possible to avoid possible delays in acquiring their inventory,” said Baer.
“Every importer, exporter, and even domestic shippers should be watching developments very closely this week because the impacts of a port strike on the U.S. East Coast and Gulf Coast ports could potentially impact all modes if there is a strike, and if it lasts longer than a few days,” said Brian Bourke, global chief commercial officer of Seko Logistics.
The ILA is North America’s largest longshoremen’s union. In a social media post Sunday, the ILA said its 85,000 members, “joined in solidarity by tens of thousands of dockworkers and maritime workers around the world,” will hit the picket lines at 12:01 a.m. on Tuesday, Oct. 1, and strike at all Atlantic and Gulf coast ports from Maine to Texas.
Approximately 50,000 ILA union members work at the ports of Boston, New York/New Jersey, Philadelphia, Wilmington, North Carolina, Baltimore, Norfolk, Virginia, Charleston, South Carolina, Savannah, Georgia, Jacksonville, Florida, Tampa, Florida, Miami, New Orleans, Mobile, Alabama, and Houston.
No negotiations were underway and none were planned before the Monday deadline, according to a Reuters report.
In recent days, top Biden administration officials including Transportation Secretary Pete Buttigieg, acting Labor Secretary Julie Su and Director of the National Economic Council Lael Brainard spoke separately with USMX and ILA representatives urging the parties to come to a fair agreement quickly. The Biden administration has stated on several recent occasions that it will not use federal powers to force dock workers to remain on the job. “We’ve never invoked Taft-Hartley to break a strike and are not considering doing so now,” White House officials have said.
The Taft-Hartley Act, passed in 1947, was a revision of U.S. law governing labor relations and union activity that granted a U.S. president the power to suspend a strike for an 80-day “cooling off period” in cases where “national health or safety” are at risk.
The union suspended talks with the USMX in June over issues including use of automation at ports and wages, and the ports ownership group has said in recent weeks that the ILA continues to “strongly signal” that it has already made the decision to strike.
A ports strike could threaten the recent gains made in bringing down inflation and the prices paid by consumers across a wide range of goods, and could give former President Donald Trump another talking point over the key voter issue of the economy in the final month of campaigning.
Based on prior port strikes, ocean carriers normally profit from soaring freight rates based on demand for other ports as well as detention and demurrage fees on containers stranded during a ports shutdown. Analysts have been warning ocean spot rates could increase by 20%-50%. UBS forecast that 20% of Maersk’s total volume would touch a U.S. port that would be impacted by the strike. Maersk is on the board of USMX. UBS estimated that if freight rates increased 30% over two quarters, a revenue tail wind of more than $1 billion would be generated.
With a potential strike at ports up and down the East Coast and along the Gulf Coast set to begin after midnight Monday, logistics executives tell CNBC the remaining hours are critical in moving out as much trade as possible before a shutdown that will do serious damage to the functioning of the U.S. economy.
Based on data from ImportGenius, which tracks the bills of lading — the digital receipts of cargo containers — a total of 54,456 twenty-foot equivalent units (TEUs) arrived on Friday at the 14 ports operating under the master contract between the International Longshoremen’s Association and the U.S. Maritime Alliance (USMX) which expires at midnight Monday. The approximate value of that freight was upward of $2.7 billion, based on an MDS Transmodal estimate of $50,000 per container. For the weekdays between Sept. 23-27, a total of 273,417 TEUs were imputed through customs at these ports with a value of approximately $13.67 billion.
On average, it takes one week to clear out one day of a port closure. As much as 43% to 49% of total containerized goods entering the U.S are processed through ports on the East Coast and Gulf Coast.
Michael Kanko, CEO of ImportGenius, tells CNBC the economic importance of the ports impacted by an ILA strike is profound. “As our data shows, a strike of even a week will block the flow of hundreds of thousands of containers into the U.S.,” he said. “These ports are also a major gateway into the U.S. for refrigerated produce. Time isn’t on the side of importers.”
Alan Baer, CEO of OL USA, said the enormity of the freight volumes arriving Friday alone shows the scramble logistics companies are in to get the containers off the dock by close of business Monday. “Importers, in coordination with their logistic partners, should try to clear as many of their containers off open terminals where possible to avoid possible delays in acquiring their inventory,” said Baer.
“Every importer, exporter, and even domestic shippers should be watching developments very closely this week because the impacts of a port strike on the U.S. East Coast and Gulf Coast ports could potentially impact all modes if there is a strike, and if it lasts longer than a few days,” said Brian Bourke, global chief commercial officer of Seko Logistics.
The ILA is North America’s largest longshoremen’s union. In a social media post Sunday, the ILA said its 85,000 members, “joined in solidarity by tens of thousands of dockworkers and maritime workers around the world,” will hit the picket lines at 12:01 a.m. on Tuesday, Oct. 1, and strike at all Atlantic and Gulf coast ports from Maine to Texas.
Approximately 50,000 ILA union members work at the ports of Boston, New York/New Jersey, Philadelphia, Wilmington, North Carolina, Baltimore, Norfolk, Virginia, Charleston, South Carolina, Savannah, Georgia, Jacksonville, Florida, Tampa, Florida, Miami, New Orleans, Mobile, Alabama, and Houston.
No negotiations were underway and none were planned before the Monday deadline, according to a Reuters report.
In recent days, top Biden administration officials including Transportation Secretary Pete Buttigieg, acting Labor Secretary Julie Su and Director of the National Economic Council Lael Brainard spoke separately with USMX and ILA representatives urging the parties to come to a fair agreement quickly. The Biden administration has stated on several recent occasions that it will not use federal powers to force dock workers to remain on the job. “We’ve never invoked Taft-Hartley to break a strike and are not considering doing so now,” White House officials have said.
The Taft-Hartley Act, passed in 1947, was a revision of U.S. law governing labor relations and union activity that granted a U.S. president the power to suspend a strike for an 80-day “cooling off period” in cases where “national health or safety” are at risk.
The union suspended talks with the USMX in June over issues including use of automation at ports and wages, and the ports ownership group has said in recent weeks that the ILA continues to “strongly signal” that it has already made the decision to strike.
A ports strike could threaten the recent gains made in bringing down inflation and the prices paid by consumers across a wide range of goods, and could give former President Donald Trump another talking point over the key voter issue of the economy in the final month of campaigning.
Based on prior port strikes, ocean carriers normally profit from soaring freight rates based on demand for other ports as well as detention and demurrage fees on containers stranded during a ports shutdown. Analysts have been warning ocean spot rates could increase by 20%-50%. UBS forecast that 20% of Maersk’s total volume would touch a U.S. port that would be impacted by the strike. Maersk is on the board of USMX. UBS estimated that if freight rates increased 30% over two quarters, a revenue tail wind of more than $1 billion would be generated.
