Customs broker urges importers to delay their shipments to avoid East Coast strike

Bobby Dalheim //Senior Editor of Case Goods and Global Sourcing//September 9, 2024

NORFOLK, Va. – With a potentially massive strike looming over East Coast ports in early October, one customs broker and logistics provider is suggesting importers delay their shipments.

“Leading up to the U.S./Canada East and Gulf Coast labor contract expiration on Sept. 30, there is a lot of uncertainty throughout the market,” said Rachel Shames, vice president of pricing and procurement for CV International, in a blog post. CV is a member of the American Home Furnishings Alliance and often does business with furniture importers.

“There’s been no progress in labor negotiations over recent months, and it seems likely that a labor disruption will occur effective Oct. 1,” she said. “It’s also possible we will see port work slowdowns begin before the official contract expiration date. The duration of any disruption or strike is unknown; hopefully any action will last only a few days, if that long.”

As such, Shames says shippers should be prepared for delays in the coming weeks.

“If shipments can be delayed until later in October or November, it would be a good idea to consider postponing until the market settles,” she said.

Container rates to both U.S. coasts have been dropping steadily for the past six or so weeks but remain volatile. An increase in West Coast rates is expected as East Coast importers begin to shift away from the East Coast in anticipation of the strike.

“Levels have been softening gradually since July, but we expect West Coast rates will increase as of Sept.15,” Shames said. “East and Gulf Coast from Asia may continue to decline, but with the potential for major congestion, we could see extra charges announced. There is still a wide range of rates in the market: FAK levels remain relatively strong compared with fixed contract rates, but carriers are still offering special spot deals for specific sailings (although many of those sailings are filling up fast, and cargo booked on those low deals is likely to roll).”

As of early September, both parties involved in the strike – the International Longshoremen’s Assn., which represents 85,000 dockworkers, and the U.S. Maritime Alliance (USMX) – still indicate that a successful negotiation is far off. The primary issue of contention seems to be automation, as the ILA has alleged that certain ports are using an auto gate system, which allegedly violates the current contract.

“The ILA most definitely will hit the streets on Oct. 1 if we don’t get the contract we deserve,” said ILA President Harold Daggett in a recently surfaced video. “Mark my words, we’ll shut them down.”

In a press release dated Sept. 5, the USMX said the ILA continues to “strongly signal it has already made the decision to call a strike” and that it hopes the ILA “reopens dialogue.” The ILA issued a letter to its members as a response, calling the USMX release “propaganda” and explaining its stance in detail.