Guide to Coping with Port Strikes on the U.S. East and Gulf Coasts: How Shippers Can Prepare

With less than two weeks until a potential worker strike at U.S. East Coast and Gulf Coast ports, shippers need to act quickly to develop contingency plans.

The85,000-memberInternational Longshoremen's Association (ILA) and the United States Maritime Alliance (USMX) master contract expires on September 30, and negotiations are at an impasse.

Asautomation disputesandwage disagreementsstall talks, the likelihood of the union avoiding anOctober 1 strikeis diminishing. ILA President Harold Daggett has made his intention to strike clear and earlier this month unveiled astrike mobilization plan。

A strike would significantly impact operations and cargo flow at multiple ports. The ILA-USMX contract covers ports in states including Texas, Maine, New York, New Jersey, and Florida, but a strike could ripple to other regions and industries.

"Shippers with cargo destined for the U.S. from Europe, Oceania, and Asia will feel the impact especially, with effects cascading to disrupt freight flows across the U.S., Canada, and Mexico," said Mia Ginter, director of ocean freight for North America at C.H. Robinson, in anAugust blog post.

Supply Chain Dive spoke with several shipping and logistics experts about how shippers can prepare for a strike, including cargo diversion options and other considerations.

How can shippers prepare for a strike?

Shippers have several options to reduce disruptions, such as exploring alternative shipping routes.

Importers and exporters can establish a multi-coast shipping network ahead of potential labor disruptions, said Michael Aldwell, executive vice president of sea logistics at Kuehne and Nagel, in an email.

"This could take the form of transshipment capacity or operations, or on a smaller scale, using alternative coast gateways to scale up in the event of a disruption," Aldwell said.

Another option shippers have become familiar with after years ofport disruptionsis cargo diversion. Cargo can be moved to ports on the U.S. West Coast, Canada, or Mexico, said Josh Jungwirth, executive vice president of freight forwarding for the Americas at Geodis.

Which alternative ports to choose depends on factors such as cargo origin and destination, shipping routes, and available capacity, Jungwirth said.

Is air freight a viable alternative?

For time-sensitive cargo affected by a strike, air freight is an option for shippers, but it comes with higher costs and capacity concerns.

According to aXeneta report from September 5, average air freight spot rates in August rose 24% year over year to $2.68 per kilogram.

"Shippers considering air freight should remember that passenger flights will be reduced between the busy summer travel season and October. Currently, air capacity is already constrained due to increased demand from e-commerce in Asia and Red Sea diversions," said Ginter of C.H. Robinson.

Large e-commerce retailers Temu and Shein have driven arecent surge in air freight demand. According to ShipMatrix data (shared with Supply Chain Dive), in July these two retailers provided about900,000 packages。

per day to carriers in the U.S. Temu and Shein's air booking activity has tightened capacity across the market, said Kathy Liu, vice president of global sales and marketing at Dimerco Express Group, onThe Freight Buyers' Club podcast. Only a few cargo aircraft are available on the open market, further tightening air options for other shippers, she said.

What types of cargo will be affected?

If a strike occurs, all types of cargo will be affected, but goods that rely on just-in-time inventory models, such as auto parts, will be particularly impacted.

"Given the potential challenges on the export side, chemicals and agricultural products will be among the most affected cargo in the short term," said Joshua Bowen, global head of ocean freight at CEVA Logistics, in an email. "From an import perspective, any supply chain heavily reliant on the flow of goods from the Middle East, Europe, and Africa (MEA) will face challenges, so we expect the industrial and automotive sectors to be particularly impacted."

Even seasonal goods could be affected, said Goetz Alebrand, senior vice president and head of ocean freight at DHL, in an email. This includes items prepared for Black Friday or the holiday season, as well as temperature-controlled goods with limited shelf life, Alebrand said.

Is it too late to act now?

Experts are divided on whether it's too late to develop strike contingency plans now, but most agree that the longer companies wait, the more costly adjustments become.

"The key challenge is that if you want to develop contingency plans or diversion options before a disruption occurs, it will be difficult to find the needed capacity and partners, and it will be costly," Aldwell said.

Depending on the cargo's origin, it may already be too late, according to Judah Levine, head of research at Freightos. In aSeptember 10 update, Levine said that moving containers from Asia to the East Coast to beat a strike "has passed the deadline," while transatlantic shippers still have a little time to move containers. This is because transit times from Asia to the U.S. East Coast are much longer than from Europe.

Even diverting cargo to alternative ports may not be enough to help shippers avoid major challenges when a strike occurs.

"While many shippers have already started using these solutions, they are only temporary measures because if a slowdown or stoppage really occurs, none of these options will be sufficient to handle the volumes needed," said Bowen of CEVA Logistics.

Finally, even if shippers divert cargo to the West Coast, it brings issues of inland capacity. Without prior planning, cargo diverted from the East and Gulf Coasts is unlikely to receive priority in domestic intermodal truck or rail services, Ginter said.

"In addition to capacity and delay concerns, warehouse space may be needed to store diverted cargo until inland capacity becomes available," she added.