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As the possibility of strike action at ports on the US east and Gulf coasts draws nearer by the day, container shipping lines serving the region have begun to announce disruption surcharges.

On 1 September, MSC notified customers it would apply a $1,000 per 20ft and $1,500 per 40ftEmergency Operations Surcharge (EOS) from 1 October (the date set for the strike to begin) on all shipments from Europe to the US east and Gulf coasts, as well as to ports in the Caribbean, Mexico and Canada.

Under US Federal Maritime Regulations, new price hikes and surcharges must be notified to the trade at least 30 days before implementation.

That was followed by a CMA CGM advice that US east and Gulf coast local port charges for import shipments of $1,500 per teu would be applied from 11 October, while export shipments would be subject to local port charges of $800 per 20ft and $1,000per 40ft on the same date.

Today Hapag-Lloyd became the latest carrier to announce a port strike surcharge, revealing it would apply a Work Disruption Surcharge of $1,000 per teu from 18 October on container shipments to the US east and Gulf coasts.

These new surcharges serve as an advance warning of what may happen to rates in the event of a strike!

It is expected that the full effect of a port blockage on the US east and Gulf coasts on wider container supply chains, depending on how long it could last, might not be felt for weeks.

For vessels that arrive at the US east coast in the first week of October and get stuck there, it will be five-to-seven weeks before their absence is missed in Asia, and if there isa lengthy strike it will have a major impact in Asia as the carriers begin the pre-Chinese New Year rush!

Meanwhile, for US exporters, new analysis suggests the automotive and agricultural verticals in the US would be the most vulnerable to an extended strike.

The US could see a significant drop in US agricultural exports, potentially leading to increased food prices in countries that rely heavily on American produce.

For the auto industry, this could exacerbate ongoing supply chain issues, potentially leading to production slowdowns or even temporary plant closures.

A strike could also lead to inventory shortages, potentially impacting holiday shopping seasons and year-end manufacturing targets

 

As is normal we will keep you all posted as to whether the strike is proceeding!

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