On September 17th, the International Longshore Association (ILA) announced that grassroots members are preparing to take a final stance to win a fair contract: they will go on strike on October 1st to receive the wages and benefits they believe they deserve.
As the threat of strikes at ports along the East Coast and Gulf Coast of the United States intensifies, container shipping companies serving the region have begun announcing the imposition of interruption surcharges.
On September 1st, Mediterranean Shipping (MSC) issued a notice stating that starting from October 1st (the start date of the strike), an Emergency Action Surcharge (EOS) will be imposed on all goods shipped from Europe to ports in the eastern United States, the Gulf Coast, the Caribbean, Mexico, and Canada, at a rate of $1000 per 20 foot container and $1500 per 40 foot container.
According to the US federal maritime regulations, new price increases and surcharges must be notified at least 30 days before implementation
CMA CGM, a French company, recently announced that starting from October 11th, it will charge a local port fee of $1500 per standard container for imported goods from ports along the US East Coast and Gulf Coast, and $800 per 20 foot container and $1000 per 40 foot container for exported goods.
In addition, Dafei also informed customers that starting from October 1st, a "freight recovery surcharge" of $500 per standard box will be levied on all transatlantic transportation.
Hapag Lloyd recently announced that it will impose a work interruption surcharge of $1000 per TEU on container cargo shipped to the US East Coast and Gulf Coast starting from October 18th, valid until further notice.
In addition, Hapag Lloyd also stated in its latest announcement that the port strike action by the International Longshore Association (ILA) and the United States Maritime Union Limited (USMX) has not yet been determined, and negotiations with New Taiwan will continue until September 30, 2024. The company is closely monitoring the situation and will take measures as much as possible to minimize the impact on customers and business
Vespucci Maritime CEO Lars Jensen stated at the Xeneta webinar that these new surcharges foreshadow potential changes in freight rates in the event of a strike. The comprehensive impact of port blockade on the container supply chain along the US East Coast and Gulf Coast may take several weeks to manifest, depending on the duration of the blockade.
Ships that arrive in the eastern United States in the week of October and are stranded there may take 5 to 7 weeks to return to Asia. If there is a prolonged strike, it will have a significant impact on Asia, especially during the shipping peak before the Lunar New Year.
He also added, 'Shipping companies have learned how to price in markets with limited capacity, not necessarily through cost markup. When capacity is scarce, freight rates can rise faster and higher than ever before. Shipping companies learned this during the pandemic and applied this strategy during the Red Sea crisis. If there is a strike in the East Coast, they will apply this strategy again.'“
Source: SouHang Network
