by A1 WorldWide Logistics | Sep 27, 2024 | East Coast Protests, Economic trends, Shipping Logistics
A potential labor strike on October 1st has ports preparing for ILA protests across the East and Gulf coasts. International Longshoreman’s Association (ILA) dockworkers are planning on walking due to unsuccessful negotiations with the United States Maritime Alliance (USMX). In particular, the ILA is protesting for higher wages and more robust pensions and against automation usage. A strike can significantly impact U.S. supply chains, with over 40% of imports going through East and Gulf Coast ports. Analysts predict it can cost the U.S. economy nearly $5 billion a day and create backlogs from congestion. With the strike potentially impacting domestic and international shipping, ports are preparing in various ways.
How Are Ports Preparing For ILA Protests?
Ports across the U.S. East and Gulf Coast are preparing for a potential strike in various ways. Some of the contingency plans for the nation’s busiest Ports include:
Port of Savannah – To enable cargo movement before the October 1st deadline, the port will allow extended weekend gate hours. The port will also receive exports and refer cargo until September 30th. Port Authority will not be responsible for freight damages that could happen during a strike.
Port Houston – If a strike happens, the Bayport Container Terminal and Barbours Cut Container Terminal will close all container handling operations. Despite the closure, the terminals will receive export cargo through September 30th until 7 pm CT. Operations at the general cargo/multipurpose facilities (Terminal Basin Terminal) will continue during potential work stoppage.
Port of Virginia – The Port of Virginia announced that it would halt operations on September 30th for Virginia International Gateway and Norfolk International Terminal if a strike occurs. In a recent update, officials revealed they will extend gate hours for trucks on September 28th and 29th. The port also informed shippers to speak to their ocean carrier to confirm their free-time policy.
Ports Revealing Further Contingency Plans
Port of New York and New Jersey – The port will allow weekend access to APM Terminals and Port Newark Container Terminal for processing cargo. Most terminals will also have extended gate hours. Currently, the port is processing as many vessels as possible to allow a smooth shutdown without disruptions.
Jacksonville Port – 172 port employees are not ILA members, meaning the main functions will continue during regular operating hours. However, the diversified trade lanes mean a protest could impact one-third of businesses.
South Carolina Port – The Port Authority plans to expand gate hours based on cargo demand. If the South Carolina Port stops operations, the port will not charge container storage fees. A significant focus will be on yard equipment availability and full staffing before the strike date occurs. The port’s SMART Pool chassis system will also have additional inventory.
With a protest quickly approaching, a shipper should understand the effect that it can have on their shipment. Along with monetary loss, it can mean massive disruptions and delays for their supply chains. Brokers assist with the clearance of imports by ensuring that it complies with customs rules and regulations. They give shippers an idea of what to expect and the best action. Talking to a customs broker can be ideal when bringing cargo during a disruption. Contact A1 Worldwide Logistics at info@a1wwl.com or 305-440-5156 to speak to a customs broker regarding your import. We are familiar with importing through East and Gulf Coast ports and can navigate your shipment through any disruptions.
by A1 WorldWide Logistics | Sep 25, 2024 | East Coast Protests, Supply Chain
Finding solutions for navigating a port strike is becoming increasingly essential, with a coastwide ILA protest nearly a week away. The International Longshoremen’s Association (ILA) plans to strike on October 1st when their six-year contract ends. Talks with the United States Maritime Association (USMX) about new contracts have stopped, and the deadline is quickly approaching. Supply chains that import into East and Gulf Coast ports may soon feel disruptions from port shutdowns. Over 43% of all imports into the U.S. go through these ports, resulting in billions in revenue. This article will explain some ways to mitigate the effects of a potential strike.
What is the Impact of a Coastwide Strike?
The ILA is a union of over 65,000 members handling cargo at nearly 40 East and Gulf Coast ports. With the size of the ILA, a protest can bring more than half of U.S. port operations into pause. A supply chain analyst notes that ports may not clear a two-week strike until 2025. Key industries that the strike will significantly impact include manufacturing, agriculture, retail, energy, and petrochemicals. In particular, a complete shutdown of ports will lead to delays for import and export shipments. Once a carrier enters a port, it could stay days at the dock, not being unloaded by workers. Shippers have already begun rerouting their cargo to West Coast ports to avoid potential slowdowns.
Rerouting to West Coast ports may also lead to longer transport shipper transport times and higher costs. Another impact of an international strike is that fees for international shipping can drastically increase. These expenses include capacity costs, per diem, storage, demurrage chassis, pre-pull, etc. Shippers, carriers, and clients feel the effects of a port strike. For example, clients can view carriers negatively if they have to increase costs and reroute shipments. With the amount of revenue the U.S. generates from exports and imports, a strike could cause extensive economic damage.
The Best Solutions for Navigating A Port Strike
Due to the substantial effect of a potential strike, finding solutions for protecting your cargo is critical. This can mean delaying the shipment until the protest is over. Freight leaving from a port of origin after September 20th will likely be affected by the strike. For goods that are already in transit, redirecting to West Coast ports may be the best solution. It is crucial to understand that West Coast ports are already at high volumes due to the number of shippers rerouting, so you may experience higher transit times. Using other methods of conveyance, like shipping by land or air, can be beneficial for crucial shipments.
With the strike approaching quickly, shippers must be current by constantly checking the news. Another way to protect your cargo is by shipping with the assistance of a freight forwarder. Forwarders ensure the transport of your goods in the most effective, safest, and cost-effective way. They educate the shipper on what to expect and find the best action for your cargo’s transport. A1 Worldwide Logistics has freight forwarders, along with an extensive number of solutions for navigating a potential strike. Speak to us at 305-425-9513 or info@a1wwl.com for assistance importing or exporting in and out of the U.S.
by A1 WorldWide Logistics | Sep 19, 2024 | East Coast Protests, Shipping Logistics, Supply Chain
As a potential ILA protest approaches on October 1st, a recent impact is the strike lowering spot rates. The International Longshore Association (ILA) Is planning to halt operations next month when their six-year contract terminates on September 30th. Along with higher wages and pensions, the ILA is protesting for better labor conditions and opposing port automation. Ongoing talks between the ILA and the United States Maritime Association (USMX) stopped weeks ago without a contract resolution. A strike could affect international and domestic shipping in various ways, including pausing cargo movement and causing congestion. A potential port stoppage has already impacted shipping with a significant decline in East Coast spot rates.
How Is A potential Strike Lowering Container Rates?
Spot rates for containers going towards East Coast ports have declined due to the potential ILA strike. The Drewry’s World Container Index (WCI) noted a 21% decrease in rates from Shanghai to New York. During the week of September 9-13, the WCI decreased 13% to $4168 per 40ft container. The recent decline is resulting in shippers rerouting to West Coast ports to avoid the strike. As a result, demand for shipping to East Coast ports is decreasing, resulting in lower rates. While this has been the third consecutive week of decline, it is 282% higher than the pre-covid average. The Drewry index expects rates to fall faller in the next few weeks.
Containers going to West Coast ports had the opposite effect, with a one percent increase for 40ft containers. Along with increasing and decreasing rates, rerouting can have other effects, such as congestion due to higher volumes. The Los Angeles and Long Beach Ports are already the busiest in the U.S. regarding volume. An increase in traffic could lead to delays in supply chains for importers and exporters to the U.S. Another way shippers mitigate the impact of a potential strike is by shipping earlier than usual. Some even look for other conveyance methods like air and land to avoid delays.
The White House Will Not Block Potential Strike.
On September 17th, the National Retailers Federation (NRF) sent a letter to the Biden administration regarding stopping the potential strike. The message says, “A strike at this point in time would have a devastating impact on the economy, especially as inflation is on the downward trend.” NRF is a group of 177 trade associates that rely on East and Gulf Coast ports for importing and exporting. Despite the letter from the NRF, the White House replied that it was not intervening in the protest. U.S. presidents may invoke the Taft-Hartley If necessary. This act forces dockworkers back to work for an 80-day cooling-off period if the disputes potentially threaten national security.
Despite not being involved, a White House representative said, “We encourage all parties to remain at the bargaining table and negotiate in good faith.” While lower rates may be attractive to shippers, it is due to a potential protest that can affect international shipping. A way to protect your goods is by using the help of a freight forwarder. A forwarder is the middleman who coordinates cargo movement on behalf of the shipper. They find solutions for navigating situations like port closures. Contact A1 Worldwide Logistics at info@a1wwl.com to speak to a forwarding regarding transporting your shipment internationally.
by A1 WorldWide Logistics | Sep 17, 2024 | Economic trends, Importing, Shipping Logistics
The Biden Administration has finalized a tariff increase on imports from China starting September 27th. On May 14th, the USTR (United States Trade Representative) announced adjustments to Section 301 tariffs after a four-year review. These tariffs fall under the Trade Act of 1974, a law promoting fair international trade. In particular, section 301 allows the president permission to adjust tariffs to retaliate against foreign trade barriers. The finalized increase will see a hike in tariffs for electric vehicles, batteries, solar panels, semiconductors, and more imports. While the U.S. will phase out the tariffs in the next three years, some will take effect in 2024.
Why Is There A Tariff Increase On Imports?
The tariff increase on Chinese imports is being implemented by the U.S. government to counter China’s unfair trade practices. Over the past few years, China has come under fire for practices such as intellectual property theft. Chinese companies that the government backs have been accused by the U.S. of stealing foreign technology and trade secrets. The companies then use the technology and trade secrets to reverse engineer products, cyber espionage, and force technology transfers. Another practice that has raised concern has been using state subsidies to give them an unfair advantage. These subsidies include the Chinese government providing financial support to domestic industries and lowering production costs.
Other unfair trade practices that the U.S. has accused China of include currency manipulation and dumping. Dumping is the exportation of products that is lower than the production costs, which companies can do to undercut foreign competitors. China responded by firmly opposing the new tariffs, believing it goes against the U.S. president’s commitment to not “suppress and contain China’s development.” China’s Ministry of Commerce noted, “China will take resolute measures to defend its rights and interests.” The tariffs will cover $18 billion of imports in the clean energy and technology sectors.
The Categories That Will Increase Tariffs Include:
Steel and Aluminum – From 0 to 7.5% to 25% in 2024.
Semiconductors – from 25% to 50% by 2025.
Electric Vehicles (EVs) – from 25% to 100% in 2024.
Batteries, Battery Components and Parts, and Critical Minerals – from 7.5%% to 25% in 2024
Solar Cells – from 25% to 50% in 2024.
Ship-to-Shore Cranes – from 0% to 25% in 2024.
Medical Products – from 0% to 50% in 2024.
There has been a notable increase in Chinese-produced EVs (electric vehicles) from 25% to 100%. This is to protect the U.S. from the surge in Chinese EV imports. From 2022 to 2023, EV imports from China rose nearly 70%.
A1 Worldwide Logistics
When shipping cargo internationally, situations may arise, such as a tariff increase that can affect your shipment. Being informed and well-prepared for these circumstances is essential in preventing significant backlogs in your supply chain. Using the assistance of a 3PL (third-party logistics) provider is ideal when starting. 3PLs handle numerous parts of a shipper’s supply chain, including international and domestic shipping, warehousing, customs brokering, etc. They also educate you on the best course of action when shipping. To speak to a 3PL company regarding broker importing into the U.S., reach A1 Worldwide Logistics at 305-425-9456 or info@a1wwl.com. We have freight forwarders and customs brokers that can ensure that you meet your goals.
by A1 WorldWide Logistics | Sep 12, 2024 | East Coast Protests, Economic trends, Shipping Logistics
Threats of an ILA walkout are causing the shipping industry to be concerned with the potential impact of a strike. The International Longshoreman’s Association (ILA) will stop working on October 1st when their six-year contract ends. Along with higher wages, other issues include benefits and automation. Talks with the United States Maritime Alliance (USMX) regarding a new contract addressing these concerns have remained unsuccessful. Despite the ILA’s demands, USMX remains unchanged on their current offer. The ILA’s president, Harold Daggett, recently said in an ILA-released video, “Mark my words, well shut them down.” A strike will impact many supply chains that rely on shipping freight internationally.
What Is The Potential Impact Of A Strike?
Due to the ILA’s size, a potential strike can significantly impact the shipping industry differently. The ILA is a union of 45,000 workers in three dozen ports across the East and West Coast. These ports are responsible for approximately 43% of all imports that come into the U.S. The main effect of a strike will be a halt of cargo movement through the ports. As imports and exports stop moving, containers will begin piling, leading to port congestion. Due to congestion, supply chains transporting cargo internationally could experience massive delays in loading and unloading times. A week-long strike may take over five weeks to clear and may even last until 2025.
The disruption from the strike may also impact shipping costs for importers and exporters. When port closures happen, shipping companies raise freight rates due to limited capacity. As vessels pile up in the ports for unloading, it leads to demurrage and detention fees that goes the shipper. To mitigate the delay, more shippers are rerouting their shipments to West Coast ports. Rerouting may become an issue for West Coast ports since it can cause congestion, leading to delays. Similarly, importers could switch to other conveyance methods like land and air. However, this may lead to other expenditures.
Different Sectors Are Urging the ILA And USMX To Come To An Agreement
Different sectors, like the retail and manufacturing industries, have been mainly concerned with the effect of a strike. These industries are pushing the parties to agree to alleviate a potential multibillion-dollar disruption. With the holiday season quickly approaching, companies have already started taking action. The National Retail Federation (NRF) vice president notes, “Many have taken steps to mitigate the potential impact by bringing in products earlier and frontloading the peak shipping season or by shifting products back to the West Coast.” A fear is that retailers will not be able to stock shelves on time for the holidays. Manufacturers’ assembly lines may also shut down if they do not receive the necessary materials on time.
Other industries, like construction, automotive, and farming, will also feel the impact of a strike. Ports with ILA dockworkers like Houston and Savannah import tons of materials for these industries yearly. On a large scale, the economy will feel the effect, and supply chains globally will also feel the effect. While a potential strike can seem daunting if you are a shipper, it should not stop your cargo’s transport. Reach A1 Worldwide Logistics at info@a1wwl.com or 305-425-9513 for any concerns regarding your shipment. Along with educating you on what to expect, we provide transparency and real-time updates on your cargo’s status.
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