Hapag-Lloyd and CMA CGM announced new charges as strike nears on U.S. East and Gulf Coast ports. The International Longshoreman Association (ILA) plans to protest on October 1st as their six-year contract ends. Unresolved negotiations with the United States Maritime Association (USMX) regarding automation, wage increases, and higher pensions are causing the protest. ILA president Harold Daggett said in an ILA-released video over a week ago, “Mark my words, we’ll shut them down.” The Biden Administration said it will not intervene and invoke the Taft-Hartley Act for a cool-off period. As a result of the strike, two top container lines revealed new surcharges effective mid-October.
Starting October 11th, CMA CGM will charge an extra $1,500 per TEU importing to East and West Coast ports. CMA CGM will also impose a surcharge of $800 per twenty-footer, $1,000 per forty-footer, and $1,266 per forty-foot container for dry and tank exports from the ports. Reefer export surcharges will be $1,000 per twenty-footer and $1,500 per forty-foot container. CMA CGM will also apply a $500 per rate restoration initiative on transatlantic shipments beginning October 1st. Hapag-Lloyd has announced a Work Disruption Surcharge (WDS) starting October 18th. The WDS will be $1,000 per TEU for imports into the U.S. East and West Coast ports from:
- North Europe
- Latin America
- The Middle East
- The Indian Subcontinent
- North Europe
- The Mediterranean
- Africa
Why Are Container Lines Announcing New Surcharges As Strike Nears?
The new surcharges are due to the effect a potential protest can have on the industry. East and Gulf Coast ports handle approximately 55.5% of year-to-date U.S. container imports, accounting for 8% of container volume globally. Containers going to the East and West Coast ports will particularly feel the impact of port closures. Port closures for one week could take six to eight weeks to recover from. Container lines are adding extra surcharges to protect against the probable scarcity in the market. Vessels arriving at East and Gulf Coast ports after October 1st will get stuck for weeks, resulting in limited capacity.
Florida International Terminal Introducing Contingency Plan Due To Strike
Along with the new surcharges, the East and Gulf Coast terminals are implementing emergency strategies due to the strike. Port Everglades, Florida International Terminal (FIT) announced a contingency plan for port operations including:
- Vessel Operations – All vessel operations will stop at 6:00 pm on Monday, September 30th
- Refrigerated Cargo – The terminal will not be liable for any refrigerated containers remaining during the protests. Fit also recommends picking up reefer containers before 4:00 pm on September 30th.
- Export Cargo – In the week of October 1st, the terminal will accept not except export cargo for vessel scheduling.
- Gate Operations – Gate operations will continue operating seven days a week during the strike.
- Demurrage – Containers in demurrage during the ILA protests will remain in demurrage, and containers in free time will stay in free time.
With the potential strike having significant implications for international and domestic shipping, shippers must be ready for what’s to come. This can mean constantly being informed of the situation by checking the news and planning. Contacting a third-party Logistics provider (3PL) can also be helpful. Reach A1 Worldwide Logistics at 305-425-9456 or info@a1wwl.com to stay up-to-date with any occurrences in the shipping industry. Along with educating you on what to expect, we find solutions for protecting your shipments from disruptions.
