- A dockworker strike on the US East Coast is expected to disrupt shipping from 1 October 2024.
- Ship diversions are limited, with few alternatives in Mexico and Canada, and no redirection to the US West Coast is possible due to union picketing.
- A potential rail freight strike in Canada adds further risk to North American logistics.
The CEO of Ocean Network Express (ONE), Jeremy Nixon, revealed that US East Coast terminals could come to a halt by 30 September, due to the impasse between USMX (representing port employers) and the ILA (dockworkers’ union). The dockworkers have pledged to strike coast-wide if no agreement is reached to replace the expiring labor contract, reports Seatrade Maritime.
Shipping Lines Prepare for Strike
Jeremy Nixon, speaking at Marine Money Asia in Singapore, shared that ONE has been preparing for the impending disruption. Most customers have brought forward shipments to minimize the impact, though a small number have diverted cargo to the West Coast.
Limited Diversion Options to the West Coast
Despite some cargo being redirected, Nixon clarified that vessels bound for the East Coast cannot be diverted to West Coast ports. He noted, “The ILA has made clear it would picket such a move.”
Vessels Expected to Wait Offshore
For ships already en route to East Coast ports, options are limited. Maersk, in a customer update, confirmed vessels will anchor temporarily until the situation is resolved, though no clear timeframe has been provided for how long the wait might be.
Alternative Options in Mexican and Canadian Ports
Redirecting vessels to Mexican or Canadian ports isn’t a viable solution. Nixon commented that, “Mexican ports are running at very high utilization levels, as are the Canadian ports.” The freight capacity of these ports can’t meet the needs of the US market.
Potential for Further Rail Disruptions in Canada
A related concern is the possibility of a rail freight strike in Canada. Nixon emphasized that the situation with Canadian railroads remains tense, and further industrial action is possible, which could affect North American supply chains in October and November.
Past Rail Disruption in Canada
Canada experienced a brief rail disruption in August, where a lockout by CN and CPKC was followed by an 18-hour strike by Teamsters Canada Rail Conference (TCRC). The Federal government intervened to resolve the issue, but further action remains a possibility.
Growing Concerns for North American Logistics
The unresolved disputes on both fronts—dockworkers in the US and railroads in Canada—pose a significant threat to the smooth functioning of North American logistics, especially as the peak shipping season approaches.
Nixon’s remarks highlighted the severity of the situation: “Vessels now on their way to the East Coast will have to sit and wait until that industrial disruption is resolved.”
Cargo Owners Rush to Minimize Impact
To mitigate risks, cargo owners are speeding up their import processes. However, in the event of a strike, they may face severe delays, as alternative destinations remain limited and congested.
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Source: Seatrade Maritime News
