Dozens of cargo ships bound for the United States will be forced to wait
A prolonged strike in the eastern United States and Gulf Coast could deal a severe blow to the global container supply chain.
Peter Sand, principal analyst at Xeneta, said ships waiting for berths at U.S. eastern and Gulf Coast anchorages would have a ripple effect, affecting carriers' ability to maintain schedules on other routes.
"There are many ships on the ocean at the moment carrying billions of dollars worth of cargo to ports in the eastern United States and along the Gulf Coast," Mr Sand said.
In fact, according to an analysis of ship arrivals scheduled to call at the Port of New York and New Jersey for Week 40, 39 container ships are expected to call at the port next week - 28 of which are currently scheduled to call and 11 of which were scheduled to call this week but are currently delayed.
According to eeSea's liner schedule, the first vessel currently expected to arrive after the October 1 deadline is the 5,500 teu Monte Tamaro, which is deployed on the South American East Coast-North American Tango route jointly operated by Hapal-Maersk, It is expected to arrive at Port Elizabeth Terminal at APM Terminal at 4.15am on October 1.
The Guangzhou, Chongqing and Seaboard Pioneer, all involved in some kind of transatlantic trade, are expected to arrive in New York on the same day. Similar conditions are expected at other ports in the eastern United States and along the Gulf Coast.
Mr Sand added: "The ships can't turn back or really change course to the west coast of the US, some may divert to ports in Canada or even on the east coast of Mexico, but the vast majority will just wait outside the affected ports until the workers return." The consequences will be severe, not only causing congestion in US ports, but more importantly delaying the return of these ships to the Far East for their next voyage.
"A strike lasting just one week would affect the schedules of ships leaving the Far East for the US at the end of December and throughout January," he explained.
According to the latest U.S. port throughput data released by maritime economist John McCown, the total value of cargo shipments at U.S. ports in August amounted to $194 billion, of which 50.6 percent occurred on the Eastern and Gulf Coast.
According to McCown's analysis, about 16 percent of the world's container shipping fleet is deployed in the eastern United States and along the Gulf Coast, which he notes is "twice the amount of capacity loss for the entire industry as a result of the Red Sea situation," and he argues that the economic impact of the strike on U.S. importers and exporters, as well as the national economy as a whole, makes a prolonged strike less likely than some fear.
"In my view, a massive Maine-Texas strike would be disastrous for the economy, so it is unlikely to happen because it would force Biden to invoke the Taft-Hartley Act to demand that unions end the strike," he said.
"Neither the unions nor the government want to go down this road. I expect more limited action against specific ports and terminals. While these actions could be extremely disruptive, it is doubtful whether they would be sufficient to invoke the Taft-Hartley Act, "he wrote in his latest monthly analysis.
Mr Sand also said some form of government intervention was increasingly likely: "Blocking trade on such a large scale, even for a short period of time, would be so damaging to the economy that it would require government intervention to resolve the issue for the good of the country."
"Government intervention should be seen as an advantage of the system as it prevents disputes between smaller interest groups, whether dockworkers or port terminal owners, from having a significant impact on the wealth of the country as a whole."
"If the two sides can't resolve the dispute on their own, then someone needs to do it for them, because a prolonged shutdown of trade in the eastern United States and the Gulf Coast would cause serious damage to supply chains and the economy," he argued.
Peter Sand, principal analyst at Xeneta, said ships waiting for berths at U.S. eastern and Gulf Coast anchorages would have a ripple effect, affecting carriers' ability to maintain schedules on other routes.
"There are many ships on the ocean at the moment carrying billions of dollars worth of cargo to ports in the eastern United States and along the Gulf Coast," Mr Sand said.
In fact, according to an analysis of ship arrivals scheduled to call at the Port of New York and New Jersey for Week 40, 39 container ships are expected to call at the port next week - 28 of which are currently scheduled to call and 11 of which were scheduled to call this week but are currently delayed.
According to eeSea's liner schedule, the first vessel currently expected to arrive after the October 1 deadline is the 5,500 teu Monte Tamaro, which is deployed on the South American East Coast-North American Tango route jointly operated by Hapal-Maersk, It is expected to arrive at Port Elizabeth Terminal at APM Terminal at 4.15am on October 1.
The Guangzhou, Chongqing and Seaboard Pioneer, all involved in some kind of transatlantic trade, are expected to arrive in New York on the same day. Similar conditions are expected at other ports in the eastern United States and along the Gulf Coast.
Mr Sand added: "The ships can't turn back or really change course to the west coast of the US, some may divert to ports in Canada or even on the east coast of Mexico, but the vast majority will just wait outside the affected ports until the workers return." The consequences will be severe, not only causing congestion in US ports, but more importantly delaying the return of these ships to the Far East for their next voyage.
"A strike lasting just one week would affect the schedules of ships leaving the Far East for the US at the end of December and throughout January," he explained.
According to the latest U.S. port throughput data released by maritime economist John McCown, the total value of cargo shipments at U.S. ports in August amounted to $194 billion, of which 50.6 percent occurred on the Eastern and Gulf Coast.
According to McCown's analysis, about 16 percent of the world's container shipping fleet is deployed in the eastern United States and along the Gulf Coast, which he notes is "twice the amount of capacity loss for the entire industry as a result of the Red Sea situation," and he argues that the economic impact of the strike on U.S. importers and exporters, as well as the national economy as a whole, makes a prolonged strike less likely than some fear.
"In my view, a massive Maine-Texas strike would be disastrous for the economy, so it is unlikely to happen because it would force Biden to invoke the Taft-Hartley Act to demand that unions end the strike," he said.
"Neither the unions nor the government want to go down this road. I expect more limited action against specific ports and terminals. While these actions could be extremely disruptive, it is doubtful whether they would be sufficient to invoke the Taft-Hartley Act, "he wrote in his latest monthly analysis.
Mr Sand also said some form of government intervention was increasingly likely: "Blocking trade on such a large scale, even for a short period of time, would be so damaging to the economy that it would require government intervention to resolve the issue for the good of the country."
"Government intervention should be seen as an advantage of the system as it prevents disputes between smaller interest groups, whether dockworkers or port terminal owners, from having a significant impact on the wealth of the country as a whole."
"If the two sides can't resolve the dispute on their own, then someone needs to do it for them, because a prolonged shutdown of trade in the eastern United States and the Gulf Coast would cause serious damage to supply chains and the economy," he argued.
