As the threat of widespread strike action by dock workers on US East and Gulf coasts draws nearer, shipping companies are reported to be raising spot prices for containers on routes between Asia and the US.
Citing recent data from the Shanghai Containerised Freight Index, Lloyd’s Loading List reported this week that rates on routes between Asia and the US had increased by $221 per TEU to west coast ports (up almost 9%) and by $246 per TEU to the east coast (up 6.6%). The maritime expert said the increases were reported in the shadow of a looming strike by US dock workers.
Around 15,000 port workers are ready to walk out on October 1 if talks regarding overtime rules and container royalties between International Longshoremen’s Association (ILA), and the United States Maritime Alliance (USMX) are not resolved by the end of the month.
As reported at the beginning of September, strike action could freeze activity at the ports, which include some of the busiest in North America.
The impact on container movements through the ports threatens parts shipments at a time when imports have surged, helped by strong automotive parts movements. According to trade intelligence provider PIERS, containerized imports surged 9.7% in July from a year earlier, to more than 1.56m TEUs units, with automotive parts showing a 25% increase.
The action could also hit vehicle processing at ports including Baltimore, Brunswick and Jacksonville, as well as the port of New Jersey and New York, all of which are in the top five North American vehicle ports.
Talks foundered in September when the ILA criticized the USMX for “destroying the flow of productive negotiations with outrageous proposals and a take it or leave it attitude”.
UMSX countered that it was “ready and willing to engage in comprehensive bargaining to reach agreement on a new contract” but said that any dialogue must include substantive discussion of the existing inefficiencies it perceives as having crept into port operations.
Last week negotiations were resumed with the help of the Federal Mediation and Conciliation Service (FMCS), a government agency created for the purpose of easing tense labor relations and avoiding strikes. There are less than two weeks left for a agreement to be made.
