SHIPPING: Backlog at US Gulf, East Coast ports could last 2-3 weeks after 3-day ILA strike

HOUSTON (ICIS)–Backlogs created by the three-day strike at US Gulf and East Coast ports could last for two to three weeks, although there are indications that operations could return to normal sooner rather than later at the Port of New York/New Jersey.

Judah Levine, head of research at online freight shipping marketplace and platform provider Freightos, said many industry analysts were predicting two to three weeks to clear the backlog of container ships created when the International Longshoremen’s Association (ILA) went on strike.

Levine estimated there were 45-60 vessels at anchor off US Gulf and East Coast ports from the strike.

But he said officials at the Port of New York/New Jersey, the largest on the East Coast, said the work stoppage was more akin to short weather-related closures they see with winter storms and expect operations could return to normal in a matter of days, and maybe even by the end of the week.

Levine said the larger impact could be from a build in containers at the ports.

Some ports extended gate times to allow customers extra time to collect or deliver containers.

“In the meantime, shippers with containers at the ports or on vessels at anchor or vessels arriving quite soon will probably continue to experience some delays, and for some that could impact inventory availability in the next couple weeks,” Levine said.

The strike did not impact the movement of liquid chemical tankers as most terminals that handle those vessels are privately owned and do not necessarily use union labor.

Also, tankers do not require as much labor as container or dry cargo vessels, which must be loaded and unloaded with cranes and require labor for forklifts and trucks.

Container ships and costs for shipping containers are relevant to the chemical industry because while most chemicals are liquids and are shipped in tankers, container ships transport polymers, such as polyethylene (PE) and polypropylene (PP), are shipped in pellets.

They also transport liquid chemicals in isotanks.

IMPACT OF STRIKE, HURRICANES ON TRUCKING
Market participants are also watching for tight supply or shortages of inland trucking services because of the work stoppage and because of two hurricanes in succession that hit Florida and other southeastern states.

Downstream chemical buyers and compounders could begin to see issues with road freight in terms of higher costs and lower availability.

Rates could see upward pressure given the severity of the damage to roads and highways in the East Tennessee and North Carolina regions as the US Federal Emergency Management Agency (FEMA) works to assist in the recovery.

FEMA also gets precedence on trucking to be able to move goods or equipment needed for the recovery efforts.

UPDATE ON ILA/USMX NEGOTIATIONS
While the work stoppage ended after three days, the terminology was that it was suspended until 15 January, with only the salary part of a future deal agreed to by both parties.

Levine said the union remains steadfast in its opposition to any kind of automation at the ports – full or semi – that would replace jobs or historical work functions.

Levine said the union has continued to state its case against automation even as they returned to work.

Levine said shippers will keep 15 January in mind as there is a chance another work stoppage could occur if no definitive agreement is reached by then.

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