Key Report
Author: Lisa Baertlein
Los Angeles, Sept 18 (Reuters) – A strike planned by dockworkers at East Coast and Gulf of Mexico ports on October 1 would immediately disrupt domestic cargo flows if it goes ahead, the North American CEO of French container shipping company CMA CGM said on Wednesday.
The International Longshoremen’s Association represents about 45,000 workers in 36 ports, including New York/New Jersey, Houston, and Savannah, Georgia. The union has vowed to stop work if a new labor agreement is not reached when the current six-year contract expires at midnight on September 30.
“Once you close the door, things start piling up,” said George Goldman, CMA CGM’s North American CEO, during a live stream hosted by the Port of Los Angeles.
He said even one day of closure would be too long for the ports.
CMA CGM is part of the U.S. Marine Alliance Group of Employers, which is negotiating with the International Longshoremen’s Association.
The affected ports handle about half of U.S. imports. Retailers, manufacturers, and other ocean freight companies concerned about the situation are shifting some cargo to the West Coast to reduce the risk of it being stranded at idle facilities.
Analysts from Sea-Intelligence, a shipping consultancy based in Copenhagen, estimate that clearing the backlog caused by one day of strike action could take four to six days.
Sea-Intelligence said a two-week strike could mean ports would not return to normal operations until 2025.
Transportation experts say goods imported from Europe, India, and other countries that rely on direct transatlantic routes will be hit hardest.
In the meantime, imports at the busiest ports on America’s West Coast are surging.
This is because customers of CMA CGM, Maersk, and other major container shipping companies are also rushing to buy Halloween and Christmas costumes before any potential labor action. Meanwhile, manufacturers are making large purchases of solar panels and other goods that could face increased tariffs.
The Port of Long Beach, neighbor to the Port of Los Angeles, saw its busiest month in 113 years in August with cargo volumes soaring nearly 34% year-over-year, including a 40% increase in imports.
The Port of Los Angeles reported an overall surge of 16% in cargo volume for August, with imports growing by almost 18%.
Gene Seroka, executive director of the Port of Los Angeles, said it was difficult to quantify growth due to cargo shifts from other ports. However, he noted that the port can handle about one million twenty-foot equivalent units (TEUs) per month, with August seeing a throughput of 960,597 TEUs.
“We can handle this volume,” Seroka said.
(Reporting by Lisa Baertlein in Los Angeles; Editing by Matthew Lewis)
Source: gCaptain
