ILA Strike and US Port Shutdowns: What APAC Supply Chain Leaders Need to Know

LATEST UPDATE: October 4th, 9am (AEST).

The historic United States port strike has been suspended, with a newly released statement from the International Longshoremen’s Association and the U.S. Maritime Alliance confirming that all work will resume, effective immediately. While ongoing delays and disruption are expected as the backlog clears, this resolution brings much-needed relief to global shippers.

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What’s Happening?

Due to ongoing labour disputes over wages, automation, and working conditions, on October 1st, 2024 50,000 longshoremen went on strike across the U.S., leading to the complete shutdown of all U.S. East and Gulf port terminals. For the duration of the strike, the International Longshoremen’s Association (ILA) has halted operations at 14 major ports along the U.S. East and Gulf coasts, including:

• Port of New York/New Jersey
• Port of Savannah, GA
• Port of Houston, TX
• Port of Miami, FL
• Port of New Orleans, LA
• Port of Charleston, SC, and more.

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Collectively, these ports handle nearly half of all U.S. container imports and billions of dollars in trade. So far, $21 billion worth of goods (665,700 TEUs of imports) have been directly impacted, with industries such as furniture, bedding, plastics, and wood pulp facing severe delays.

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What to Expect.

The potential for bottlenecks in global trade flow is high, especially for industries with just-in-time production models. Businesses should be preparing for a ripple effect across global supply chain including:

• Significant Delays: Major backlogs are expected, with delays likely to extend long after operations resume.
• Offshore Congestion: Numerous vessels are already anchored, with more expected, exacerbating delays. For example pre-strike data showed:some text
  • New York/New Jersey: 4 vessels anchored, with 4 more expected.
  • Savannah: 10 vessels drifting or anchored, with 16 more expected.
  • Charleston: 2 anchored, with 3 more expected.
• Increased Costs: Shipping rates are set to rise, with surcharges up to $2,000 per container announced to cover congestion and uncertainty.
• Uncertain Schedules: Shipping schedules are indefined, with no firm delivery dates in sight.‍
• Extended Recovery: For every day the ports remain closed, recovery is expected to take approximately a week, causing delays even after the strike ends.

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What APAC Shippers Should Do?

This strike comes on top of a market already navigating Peak Season pressures, Red Sea conflicts, and extreme weather events. Here are some practical tips to minimise the impact:

• Reroute Shipments: Consider airfreight for urgent orders and/or explore alternative ports and logistics routes that will keep your goods moving, even at a higher cost. 
• Use Real-Time Tracking: Platforms like Explorate allow you to track your container in real-time, helping you monitor rerouted vessels and plan accordingly.
• Boost Inventory: Where possible, increase inventory levels to buffer against shipment delays.
• Work with Multiple Forwarders: Diversifying logistics providers can help reduce the risks associated with depending on one route or port.‍
• Stay in Communication with Partners: Keep in close contact with suppliers and logistics partners to prioritise key shipments and adjust plans.

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The Long-Term Outlook.

The longer the strike lasts, the more severe the disruption will be across global supply chains. Proactive planning, staying informed, and maintaining flexibility will help minimise the long-term impact on your business.

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Explorate will continue to provide updates on rates, reliability and disruptions via our Fortnightly Market Updates. Subscribe via LinkedIn or our blog to stay on top of market changes. Alternatively reach out to our team for advice or the latest insights.

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